When you pass away, your home will become a part of probate. You might decide to simply give the keys of your home over to your child. However, if you simply hand your home over to your child, you might run into issues related to taxes and qualifying for Medicaid. Therefore, you will instead want to speak with an inheritance attorney over what options will be the best for you and your family.
Leaving Your House to Your Children in Your Will
If you leave the house to your children in your will, they will be given what is called a "step-up in basis." In this situation, you do not have to pay for the small appreciation that occurred through taxes between when you handed the house over and when you passed away.
Because of the increase in taxes, many family members will try to give their homes back to their parents to avoid paying the extra amount of money owed in taxes. However, there is usually not enough time to do this.
Transferring a Home to an Adult Child with Marital Problems
If your adult child has marital problems, a divorce could lead to your home becoming half of the marital assets that have to be divided. If you wait to give the home to your child, once the divorce is over, your child might receive the home as part of an inheritance and be able to keep the entire house.
Avoiding Creditors of Adult Children
If you hand the keys over to an adult child who is being hounded by creditors and has a lot of debt, your home might become subject to bankruptcy proceedings or might have liens attached to it.
Qualifying for Medicare
Giving the home back to you so you may qualify for Medicaid might not work because there will be a five-year lookback period and also a penalty period. If you need long-term care, you might not be eligible for Medicaid. This is because your Medicaid can be affected by the assets that you own.
Hiring an Inheritance Attorney
There are often less stressful and expensive ways of doing things when handing assets over to a loved one. You may be able to avoid paying unnecessary taxes and you may also discover that there are other ways in which you would like to distribute your assets. With the help of an experienced inheritance lawyer, you will safe time and also understand your legal options.
Share31 March 2021
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