Protecting Oneâ€™s Home
Weâ€™ve all known someone who has lost their home because they had to go into a nursing home. This does not have to happen! If a family plans in advance, the home can always be protected.
Many people make the mistake of trying to protect their home by giving it to their children. This is almost always a mistake! First of all, the parents will lose their property tax exemptions. Next, the property will be subject to the childrensâ€™ legal claims â€“ including spousal claims in the event of divorce.
Lastly, a simple transfer to children during life will result in a capital gains consequence upon the parentsâ€™ death. This means that the children will pay taxes on the difference between their ultimate sale price and their parentsâ€™ original purchase price!
Instead, one can and should explore options to protect the home without the negative consequences, the two basic options are a Life Estate (with or without a Special Power of Appointment) and a Family Trust.