You ever wondered how your parents’ home should be handled when they become incapable of doing so? You must have heard about nursing homes. Does a trust protect assets from a nursing home? Everyone believes they can help their parents better than anyone else. Why do they need to give away their home to you? Reach out to our best elderly care lawyers around you in NY and leave the harder part to us. We are ready to help.
All You Need to Know About Why and How Your Parents Should Give Their Home to You:
Estate planning prevents your parents’ home and pension from nursing homes. An elderly care lawyer can help you in ensuring you prevent your assets from judgments. In most scenarios, the home is the largest asset and no one is willing to sell their home for longtime care. This would probably be a loss that no one would want. There are ways in which your parents’ home can be transferred to you. However, some circumstances may throw challenges in your way as you try to transfer your parents’ home to your name. What is it that you can do to avoid such circumstances? These are the estate lawyer questions. Our estate planning lawyer provides the perfect answer. This article is about the benefits you get when the parents give away their home to you, what your parents need to do so, and what it means to you, the parents, and the property in question in case you find yourself in such a situation.
Why Parents Should Give Their Home to You
Giving a Home to You Will Reduce the Amount of Taxes in The Event of Their Death.
Gifting of a home reduces the amount of taxes in the event of death as it reduces the value of the property. There is an estate tax exemption of $11.7 million. What does this mean? One can gift an estate of up to $11.7 million estate value without incurring estate tax. In a case where there is a married couple, they can gift a combined $23.4 million together without incurring any federal estate tax. However, this federal estate tax exemption is set to end on January 1st, 2026 and it has to go back to $5 million. On the other hand, the exemption is currently at $6 million in New York City. This is because there is no average individual falling in the federal estate threshold. For you to do estate tax planning you have to do a review of your parents’ assets together with the value of their home.
Giving The Home to You Protects It from The Nursing Home.
In New York City, the New York Medicaid program takes care of the elderly in longtime care at home in a nursing facility as long as the applicant is medically and financially qualified. An applicant must have no more than $16000 in their name minus the counting tax-deferred retirement accounts. A home is considered exempt as long as its value is no more than 905, 000. In the event of death of the applicant with the residence in their sole name, the nursing home may be put alien to the property.
To protect your parents’ property from such, the property has to be transferred out of their name. There is a five-year lookback by the nursing agency. You may have to consider this to protect the property fully.
It is best to consult an estate planning and elder law attorney at the Morgan legal group to learn about what kind of planning best suits your parents’ needs.
Challenges That May Come Along with The Transfer of a Home by Parents.
Even though the transfer of ownership of your parents’ home protects it from the nursing home it comes along with some disadvantages.
If you are sued or get divorced. Your parents’ property can be used in the divorce settlement or attached to the case in which you are sued. This property is protected from the nursing home, as a result, it is considered as your asset therefore it is subject to creditors.
On the other hand, parents lose control over it since you put your name over the property. In an unexpected event if you die before your parents and your name is on their home you will have to leave everything for your spouse. This makes them your parents’ landlord. This isn’t a situation your parents would like.
You might also end up paying extra taxes to pay at their death. Normally in the inheritance, you inherit the value of the property at the time of death, this means there is no capital gains tax to be paid in case you want to sell the property. However, in the event, the property is transferred to you during their lifetime. In the event of death, you will have to pay the capital gains tax on the value accumulated during the time you had the ownership.
FAQs: Estate Planning and Nursing Homes:
What do we mean by elder law?
This is a part of the law that addresses the wide legal needs of the aged. It deals with legal issues affecting elderly parents and their property.
How does elderly law work?
Legal issues concerning the elderly are controlled by complex regulations and laws that defer depending on the state. They are also wide, they mostly require a unique understanding of the personal impacts of aging, which results in a person being physically financially, and socially vulnerable.
How do I benefit when my parents give away their home to me?
This helps protect their home from being sold by the nursing home.
It also helps reduce the amount of taxes paid in the event of their death.
Who is an elder law attorney?
This is an attorney that helps adults and families. He has the essential documents and necessary legal rights to provide the best care for older adults.
What is the federal exemption fee in the US?
The value is set at $11.7 million except for New York City which is at $5.93 million
What are the disadvantages of parents giving away their home to me?
This action leads to paying some extra taxes if you want to sell the property in the event of the death of your parents.
Do I need to hire an elder law attorney?
Yes. You need to hire one since an elder law attorney provides unique expertise for older clients and their families. They act as advocates for the rights of the elderly.
What is the right age to seek guidance from an elder law attorney?
There isn’t a specific age to seek elder attorney services but as someone is approaching their 60’s is the most appropriate time as they may not risk not having their money not protected.
How do estate planning and elder law differ?
Elder law puts more emphasis on what happens while you are alive, on the other hand, estate planning focuses on what happens after you are dead.
Why is the tax exemption in New York City lower than the rest of the country?
This is because an average individual in New York City doesn’t lie within the federal tax exemption level.