“My wife and I want to deed our home to our children. Would we need an attorney to do this?”

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www.ElrodFirm.com

Fayetteville 479.750.1101 Bentonville 479.268.5678

Answer:

Yes, you should consult an attorney about deeding your house to your children. Many people think a deed is a deed, but that kind of thinking is wrong and dangerous.

Why do you want to deed your house to your children in the first place? What goal(s) are you trying to accomplish? Are you trying to avoid probate? Are you trying to protect your home from the high costs of long-term care? Those are good goals but deeding your home to your children may not be the best way to accomplish them.

In some cases deeding your home to your children can be counterproductive. Medicaid and VA benefits rules, for instance, both impose penalties against applicants who have transferred assets within a certain number of years. If you’re planning to deed the home long before you anticipate the need for benefits the penalties should not be an issue. There are adverse tax consequences that can surprise you under your current plan.

Several considerations need to be brought up on how you actually word a deed like this. Should you use a warranty deed, a quitclaim deed, a life estate deed, or a beneficiary deed? Like I said, there is a lot to consider.

The attorneys at my firm would love to visit with you about this, and make sure you do it in the safest way possible without causing any major tax problems. Check out our website, ElrodFirm.com, to learn more, to leave us a message, or to request a no-charge strategy session.