How to protect your house regarding Medicaid?

Instead of setting up an irrevocable trust (in my case, converting over from a revocable one) in order to protect your house from a potential nursing home stay in the future, isn’t it simpler and less expensive to just sign over the house to your children?

Asked on October 8, 2013 under Estate Planning, New York

Answers:

Paula McGill / Paula J. McGill, Attorney at Law

Answered 7 years ago | Contributor

There are several ways to protect your assets.  However, there are time limits regarding the transfer.  Therefore, you should not do this without counsel.  It should not cost that much to do so. 

You can transfer the property to your children, BUT retain a life estate in the property.  This protects you from the possibility of having your children sell the house from under you or from having their creditors come after the house.  However, with a life estate, if you wanted to sell the house and move, you would need your children's permission to sell the house.  Moreover, the value you would receive on the house would be the value of your life estate.  Your children would receive the remaining value. 

With few exceptions, the great thing about retaining a life estate is you can remain in the house until you die as long as the mortgage and taxes are paid.  

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