<p>What does it mean to “sign their house over” to the kids? Does it mean they gave the house to them? If so, doesn’t that trigger the gift tax? And also, don’t the kids now take on the price the parents paid for the house as their basis, and will owe taxes on it accordingly when it’s sold? I’m not challenging what they did, I’m just asking based on other things I’ve always heard but which may not be accurate. </p>
<p>Hayden, I believe that all this would do is affect how much the parents estate is taxed upon death. Since the federal estate tax doesn’t kick in until one has an estate (in 2014 of 5.34 million), it isn’t going to be an issue for most people. State estate tax could be more of a factor.</p>
<p>Often when people do this, I consider it a type of Medicaid fraud. Give away all your assets to the kids, wait five years, then you can have Medicaid pay for your nursing home expenses, even if you had been a multi millionaire. I understand that people want to leave things to the kids, but the point should not be to make your kids wealthy while you live in a government paid (and perhaps poorly run) nursing home. Your assets should be used for your care, and should you become destitute, the taxpayers will pay.</p>
<p>However, in SOSconcerns case, the in laws parents seem to be doing it unnecessarily, that is, if being eligible for Medicaid is their goal. They have children willing to take care of them, and perhaps they can even stay in their own homes as long as possible with that support. When you give away your assets to your kids, you have to really trust them. I think some kids think they’re just getting an early inheritance bonus, and they don’t have responsibility to watch over their parents (not talking about you, SOS, obviously).</p>
<p>I don’t know, it seems a bit cheesy to me to inherit money from one’s own parents and yet feel no obligation to leave any inheritance for one’s own children.>>>>>>>>>></p>
<p>Sorry. As I said, my brother and I urged Mom and Dad for years to spend it, enjoy it. Alas, I will inherit and I can spend and enjoy it. Chances are good that dh will win this one because I do adore my children, they’ve done well and are good people so it will be satisfying to know we can help them and theirs along.</p>
<p>So if parents sign the house over to the kids… .would “senior citizen property tax discount” (if applicable) be lost? </p>
<p>^No, but it probably depends on the state. . MIL put dh and his sis on her deed early on so she wouldn’t lose the house if she went into a nursing home. but she still paid her taxes with the senior citizen discount. MA.</p>
<p>Market wasi unkind to our investments today. </p>
<p>@jym626, but kind to investments we will make tomorrow :). I guess I’m assuming that you have more investing to do and have not retired. </p>
<p>It may not done dropping, I’m praying for more drop.</p>
<p>I bought some things today when the market was down 200 pts. Don’t know if that was smart or stupid, I guess we’ll see tomorrow.</p>
<p>I’ve been holding back and not piling. The only surprise is Apple stock. I thought it would go up. But the software bugs are only temporary.</p>
<p>Medicaid for nursing home care is like being on welfare. The gov’t had to adjust the rules when say the H needed nursing home care - the W was able to keep certain assets and the house. The Medicaid look back 5 years is so the parents don’t give their assets away only to then have to depend on government to care for them in nursing home.</p>
<p>MIL and FIL decided on their own to sign the house over to their children. They are paying all expenses, taxes. I think in part they wanted to do it to make it ‘easier’ when they pass. It made them feel good. Their home is in a small town and it really isn’t appreciating - so the tax bases is going to remain level. Many advisors say not to do this because say the home is worth $200,000 in 2010 when parents signed it over, but in 2017 when parents pass it is worth $400,000 - then the $200,000 ‘gain’ would be taxable.</p>
<p>Many elderly are unhappy in nursing home. H’s grandfather was in nursing home for several years in his 90’s - but he was a happy guy; he had literally no assets and small social security check (he lived rent free in a small apt within his son’s home) - his wife had died of a heart attack due to heart valve issues from scarlet fever and bypass wasn’t perfected by that time (they had 5 grown children and one in HS).</p>
<p>H just came back from seeing his parents at a family event - over 800 mile drive each way, and he is pretty shook up about their deterioration. I spent a week with them this summer, but their decline was not as upsetting to me (I had already been through my dad’s cancer and my mom’s dementia, so their decline was not as bad). H said he about cried on the drive home. We will see them at a wedding in a few weeks - we will be driving 12 hours each way, but I am glad H decided we should go (I wanted to go, but H was talking about not getting off of work…)</p>
<p>I do feel a good deal of ‘security’ with our long term care insurance policies - thankfully secured when we could buy good policies at a decent price, plus before my health would have excluded me from obtaining.</p>
<p>One can’t dodge every bullet so to speak, but we all try to do our best with having our money last through retirement.</p>
<p>How did they sign over?</p>
<p>I think some cases, people really do have to go to a nursing home. Severe dementia, particularly violent cases, as you mentioned, someone who needs constant care. But so many times people can get help in their own homes, or that of their children. It can be so much cheaper and more pleasant for them. Not always, of course. My grandmother is in a family group home and is very happy there. I wouldn’t want to take care of her, I couldn’t, too many issues. I hope my parents stay stable, because they would be serious work to take care of, no docile parents here.</p>
<p>We need to update our wills. Talking to a lawyer about this next month, but just starting to think of what we need to do. Trying to get a feel for what others have done.
(1) Is it best to put the house into a trust and make the kids beneficiaries?
(2) Should the other investments also go into the trust OR can we just assign beneficiaries?
(3) D is 21 right now - can we make her the guardian for S(who’s 16) ?
(4) Who’s the executor for your estate? We were thinking of asking friends, but adding something to say that D could be the executor after a certain age. Will that work?</p>
<p>We made the kids co executors. It’s all split equally between them, so nothing to argue about (they never would) and I trust them completely.</p>
<p>I think they changed it with the county deed - no mortgage and no liens; they changed it into being owned by all their children. So when it is time to sell (I think a grand-daughter wants to buy down the road) all will need to sign it over. It may be one brother will buy and then pass to his daughter - he currently has been renting a place close to his work, but could also drive from where this house is.</p>
<p>Not sure if they avoid probate all together, but few assets to probate with the house out of the equation.</p>
<p>My dad is still teaching half-time at UT-Austin at age 77, but he and my mom have already put their names on the list for a nice residential facility in Austin, where several older professors and their wives live. They can start out independently and transition to housing with more care, as needed. I am so thankful that they have been proactive in arranging all of this! They really are wonderful parents. Their goal for years has been to leave a good inheritance for my sister and me. They have invested wisely and still have a lot of fun, fortunately. :)</p>
<p>I have #1, but other investments have beneficiaries. From what I’ve read especially for IRA it was not useful or beneficial to be in a trust. My only worry is that the houses have no way to put beneficiaries and that’s really is the only reason to get the trust because eventually it might worth more than the estate allow. Give it time I guess.
When I made the trust, I was in #3, so I put my brother as a guardian. Now both kids are older than 18 so I will change to remove my brother. Its a lot of work for him too and he is getting older. I’m in the process of updating. so #4 is still the executor, but he doesn’t even know it. The lawyers sent papers to be update because we pay the maintenance fee. I might pay this for a while until things get settle. What that means I can still change until I don’t pay for maintenance fee.</p>
<p>While in this thread we worry whether our money will last till retirement, I’m worried whether my brain will last 30 years for retirement. The longer your brain the less money you will need in retirement.
So with that in mind, my husband and I decide to subscribe to WSJ again. We stopped getting this paper because we never had time to read it, 4-5 years without reading something except only online shows a decline. My English is getting worse, my husband who is a native English speaker, also notices a decline. I’m having a hard time reading the whole paper. I normally read everything in that paper.
What do you do to keep your brain healthy? I like to hear about it.</p>
<p>SOSConcern, how is that not subject to the gift tax?</p>