Two Reasons Why Giving Your House to Your Kids may not be the Best Way to Protect it From Medi-Cal
Are you afraid of losing your home if you have to enter a nursing home and apply for Medi-Cal? While this fear is well founded, transferring the home to your children may not be the best way to protect it. The family home does not have to be sold in order to qualify for Medi-Cal coverage for nursing home care. If you receive help from the State for nursing home care, the State must attempt to recoup from your estate whatever benefits it paid for your care. This is called “estate recovery”. If you want to protect your home from this recovery, you may be tempted to give it to your children. Here are two reasons not to:
1. Loss of Control: Transferring your home to your children means you will no longer own the house, which means you will not have control of it. Your children can do what they want with it. In addition, if your children are sued or get divorced, the house will be at risk.
2. Adverse Tax Consequences: Inherited property receives a “step up” in basis when you die, which means the basis is the current value of the property. However, when you give property to a child, the tax basis is the same price that you purchased the property for. If your child sells the house after you die, he or she would have to pay capital gains taxes on the difference between the tax basis and the selling price unless the child were to live in the house for at least two years before selling it.
There are other ways to protect a house from Medi-Cal estate recovery, including putting the home in a trust. To find out the best option in your circumstances, consult with your attorney.
Ms. MacDonald’s practice is limited to Estate Planning, Probate & Trust Administration. Ms. MacDonald maintains her practice in the Santa Clarita Valley at 25115 Avenue Stanford, Suite A-209, Valencia, California. She can be reached at 661-294-6464.
ADVERTISE WITH US
51st Annual Frontier Toyota Henry Mayo Golf Classic Tee Up For A Good Time
Henry Mayo Newhall Hospital’s signature fundraising event is in full swing, we look forward to seeing everyone on Saturday, May 11th! The 51st Annual Frontier Toyota Henry Mayo Golf Classic will be held at the beautiful Valencia Country Club Our Golf Classic benefits...
Travel the World in 2024 with “Celebrate” Journey to New Destinations Monthly at the Canyon Country Community Center
There is so much to learn from different customs and cultures and you don’t need a plane ticket to experience it all. The Celebrate event series is back for its anticipated third year and offers insights into unique destinations from around the world. Every...
Monthly Message from Mayor Cameron Smyth Buckle up for the 2024 Cowboy Festival!
The aroma of savory barbecue wafting through the air, the joy of line dancing with friends and the chance to travel back in time to the Wild West are all experiences that make the City of Santa Clarita Cowboy Festival so unique. April 20 marks the return of...
ABOUT THE MAGAZINE
Santa Clarita Magazine has set a high standard for excellence in advertising for over 34 years. A family owned and operated business, Santa Clarita Magazine has grown with the Santa Clarita Valley since 1990 and become the #1 place to advertise locally.
FOLLOW US
SANTA CLARITA MAGAZINE
PO Box 801570
Valencia Ca 91380
For Advertising information
Call or Text: 1 (661) 294-4444