What is the best way to keep our house if we have to go to a nursing home? 7 Answers as of September 07, 2011

My best advice would be for you to seek the counsel of an elder law attorney who knows how Medicaid (and VA benefits, if applicable) work. There are many options for you to choose from, and the wrong option could keep you from qualifying for Medicaid benefits (if that is your goal to pay for nursing home care). Whatever you do, do not simply gift your house to your children (if you are planning on having Medicaid pay for the nursing home care) as this will be considered a "gift" and may prevent you from qualifying for Medicaid.

This is a fairly complex question, which should be answered by an attorney who works in "Elder Law." Referrals are available from the Oregon State Bar. Do NOT simply sign the house over to anyone, as this may disqualify you from the assistance you need. Your whole situation should be reviewed by an elder law attorney.

The last thing you want to do is give it to your children or put their names on the deed with you. You do not want the home in your children's names or become partners with their problems if you put their names on it. Additionally, if you give them the home or put their names on it, then it will be considered a gift for Medicaid purposes and cause an ineligibility for a period of time if you need benefits with 5 years.

There is usually at least a 5-year waiting time requirement for Medicaid/Care purposes. This means that you can't simply "dispose" of your property in order to qualify for an upcoming government-paid/subsidized nursing home. You need to speak to an Elder Law / Estate Planning attorney as soon as possible to discuss your options.

Deeding your house to one of your children can have some effects that you may not intend. First, if you wish to sell your house, you would need your son to sign off on the paperwork. Second, the transfer to your son could result in the filing of a gift tax return (as well as the filing of one by your son should he allow you to sell it). Third, if your son is sued or divorced while you are still alive, it is possible that the house could be used to settle a judgment and be taken from underneath you. There are other strategies for saving your house and other assets but it is advisable you discuss them with an attorney as the strategies are highly dependent on your unique family and financial situation.

You are asking a complex question. You should seek legal advice before making any decisions. At the present time you and your husband can protect the home from creditors (not including the secured home loan[s]) up to $550,000 of equity through a homestead. However, if you transfer your home to your children I will lose its homestead exemption. Also a transfer will start a period of ineligibility to qualify for Medicaid. Things to consider are whether nursing home care is eminent, whether you have a child who is special needs, the availability of other assets or insurance, etc. You really need to speak with an attorney who is qualified to address your specific issues given your specific facts and desires.

The best method is typically to have an irrevocable trust created, transfer the home to the trust and make the kids both the trustees and beneficiaries of the home upon the passing of the parents. That way the home will not be subject to the creditors or the parents or the children while the parents are alive and upon the passing of the parents the children will inherit the property and thus pay little or no capital gains tax. If the house is outright gifted to the children, not only is all control of the home lost but the home itself could be lost to the children's creditor/spouse and they may have to pay capital gains taxes when they sell the house.