Should my elderly mother deed house over to me? - Trusts and Estates Legal Blogs Posted by Randal B. Caldwell - Lawyers.com

Should my elderly mother deed house over to me?

Q.  My mother is in her 80’s and still lives in her own home in Iowa.  I live two hours away in Illinois.  The house is paid for and has no mortgage or liens against it. It is probably worth about $70,000  Other than a small pension her only income is from social security.

She has worked hard to keep a modest nest egg and to keep her expenses low.  Now she says she wants to deed the house over to my brother and myself because she “doesn’t want the nursing home to get it’.  Should she do this?

 

A.  This may seem like a very simple question.  But the answer to this question is  in fact, very complicated and can require some difficult choices by your mother and the rest of the family .

 

One of the main factors in any decision is the state of your mothers health.  If she is both physically and mentally healthy for her age, the house is an asset that can benefit her for years to come.  More services have been made available in recent years to assist people with remaining  in their own home.

 

 

There are several issues you should consider before she makes any decision.

First is the question of the stability of her children.  If either child is deeded an interest in her house, and that child becomes divorced or has a judgment lien imposed on them it can put the house at risk. Transfer of assets at the urging of a child could be considered a form of financial elder abuse.   See the definition of exploitation of dependant adult at:  http://www.legis.state.ia.us/IACODE/2001/235B/2.html

 

Second, it is important to realize that the transfer of the house to the children could be treated as a gift for purposes of Medicaid eligibility. There is a five year "look back" period in Iowa.  This means that if the transfer is made within five years of the time your Mother goes into the nursing home she could be denied eligibility.  This is true whether or not she retains a life interest in the house.  Also, the individual who received the property could be subject to a claim of reimbursement by the state.

 

More details on Medicaid eligibility are found at : http://www.aging.iowa.gov/Documents/Publications/LegalAdvisory/Medicaid_for_Nursing_Home_Care.pdf

 

Third, If the house is put in a child’s name it is no longer eligible for homestead exemption.  This could raise her real estate tax bill.  Also it might have other tax consequences in the event of sale of the house as it would no longer be the sale of the owners personal residence. This could subject it to capital gain. 

 

As you can see there are many factors to consider before an elderly person should transfer a major asset to the next generation.  These factors may push the family away from the transfer of the house.  You should consult with an elder law or estate planning attorney to determine the plusses and minuses of a transfer in your case.  Your attorney may provide you with some alternatives such as putting some of the savings into home improvements, buying medical assistance equipment or arranging a prepaid funeral trust.  Expenditures of these types would allow your mother to make expenditures for her benefit without disqualifying her from Medicaid assistance.

 

 

 

 

 

Issues that occur when an elderly parent wants to deed the house to adult children.  Examines Medicaid, tax and other issues that the client should consider before making a decision.
View Attorney Profile

Randal B. Caldwell

Licensed since 1979

Member at firm Caldwell, Brierly & Chalupa, PLLC

AWARDS

AV Preeminent

RECENT POSTS

  • Will an Iowa “living will” keep me off a machine?
    Posted on December 9, 2011

    A .       Many people have been through the agony of having a loved one on a respirator or other life prolonging mechanism and want to save their loved ones from similar anguish. Iowa has an advance directive statute concerning heroic measures extending life.  Often referred to as a “living will” this statute provides for a ... Read more

  • Elderly Parent in Iowa who needs but does not want help
    Posted on December 5, 2011

    Q         My elderly father is a widower and living along in Iowa in his own home.  He is becoming more and more confused.  Generally, he is pretty healthy when I visit, but occasionally I notice a pot on the stove with nothing in it becoming extremely hot.  I have talked to Dad about assisted living ... Read more

  • Ancillary Estate Administration in Iowa
    Posted on November 28, 2011

    Q:  My aunt passed away here in Texas but she owned a farm in Iowa.  I am executor of her estate.  What do I need to do with regard to the Iowa farm?   A: In order to pass the real estate to the beneficiaries of the will, in addition to estate administration in Texas ... Read more

Randal B. Caldwell

Licensed since 1979

Member at firm Caldwell, Brierly & Chalupa, PLLC

AWARDS

AV Preeminent

RECENT POSTS

  • Will an Iowa “living will” keep me off a machine?
    Posted on December 9, 2011

    A .       Many people have been through the agony of having a loved one on a respirator or other life prolonging mechanism and want to save their loved ones from similar anguish. Iowa has an advance directive statute concerning heroic measures extending life.  Often referred to as a “living will” this statute provides for a ... Read more

  • Elderly Parent in Iowa who needs but does not want help
    Posted on December 5, 2011

    Q         My elderly father is a widower and living along in Iowa in his own home.  He is becoming more and more confused.  Generally, he is pretty healthy when I visit, but occasionally I notice a pot on the stove with nothing in it becoming extremely hot.  I have talked to Dad about assisted living ... Read more

  • Ancillary Estate Administration in Iowa
    Posted on November 28, 2011

    Q:  My aunt passed away here in Texas but she owned a farm in Iowa.  I am executor of her estate.  What do I need to do with regard to the Iowa farm?   A: In order to pass the real estate to the beneficiaries of the will, in addition to estate administration in Texas ... Read more