It is not uncommon for elderly homeowners to transfer their homes into the name of a child (or children) in hopes of reducing estate taxes, avoiding probate or to protect the home in case of long-term care claims. However, this can be a clumsy – and potentially disastrous — way of trying to accomplish these important estate planning goals.
Probably the #1 reason to proceed with caution is that by transferring your home to your children, you put your home at risk for their bad personal and/or financial decisions. Your home could become a battleground in a divorce property dispute, or laid claim to by creditors. Certainly this is not what you intended, but it happens every day.
A better way to achieve your estate planning goals is to meet with an estate planning attorney to create a trust to protect your home, avoid probate and preserve tax benefits. A trust can pass this valuable asset to your children while still providing you with lifetime ownership rights, giving you peace of mind and security.
The Flanigan Law Group is an Irvine estate planning, administration and litigation legal services law firm. For more information on estate planning strategies, contact our law firm at 949-450-0041.