I have done legal aid for senior citizens for about 8 years now and during that time I probably get this question from about 75% of the seniors that come to my clinics. The scenario is usually someone talks to their friend at church, who heard from their son-in-law, that you should donate your home to your children so the government doesn't take it. Of course, that isn't in how it works. This all falls in to a category of law called Estate Planning. It is a much broader area of the law than I can put into one article, so I will just focus on the question at hand as much as possible.
So, the initial interview actually usually begins with a senior coming in and saying that they want to donate their house to their children. My first question is "why"? Of course, they answer they don't want the government to take it in case they have to go into the nursing home. Most attorneys that don't have any estate planning knowledge would happily do their donation, to no fault of their own. In actuality this is usually
the worst thing you can do. Medicaid eligibility has two categories for your property, countable and non-countable assets. Your home, as well as your furnishings, one vehicle, wedding bands, etc. are non-countable assets. Therefore, donating your home would convert a non-countable asset into a countable asset, and if it is done within the look back period of 5 years, then you are penalized by Medicaid and not eligible for a period of time.
If you plan ahead there are ways to protect as much of your estate as possible. The most inexpensive way starts in your Last Will and Testament. It can be used an effective estate planning tool. If you have any questions, feel free to comment or contact us or if you would like help with your Last Will and Testament or would like to revise it to help with your estate planning needs give us a call at (318) 387-2201.
This article is for informational purposes only and is in no way meant to be legal advice or form an attorney-client relationship.