It may seem like a great idea to give your home to your kids or other relatives. It reduces the tax burden you have to pay, you can still live there, and you are giving an asset to your loved one for the future. There are a few reasons you may consider before gifting your home.

Medicaid Penalty

If for any reason you need to use Medicaid to pay for long term health care within five years of gifting your home to someone, you will be subject to a penalty. Medicaid looks back five years to see what you have gifted to friends and family and may suspend your eligibility for benefits until the end of those five years. Long term care is expensive. Having to pay out of pocket for it may end up being disastrous in the long run.

Reverse Mortgages

This option may not suit everyone, but in some situations it is a great way to enjoy the wealth that you have invested in your home. Gifting your home to someone else will remove that option should you wish to exercise it in the future.

Instability

Your home is yours to live in as long as you own it. If you gift it to someone then errors in judgment they make could end up removing you from your home. Even something as simple as a divorce could put your living arrangements in jeopardy.

For legal advice in gifting your home or any other eldercare topics, contact Stano Law Group today!