What’s the best way to protect my home from creditors?
That is probably the question that I am most frequently asked.
Most of the time, clients are concerned about protecting their home from long-term care expenses, like nursing home or assisted living expenses. Sometimes they’re concerned about other creditors, like the IRS or lawsuits.
Well, the “common knowledge” or “word on the street” (as I’m told) is that you should give your home to your children, or, in some circumstances, give a small fraction of the home, like one percent (1%) to them.
In this quick 3 minute video, I cover whether or not the “common knowledge” is the best way to protect your home and real estate. Enjoy!
Giving your home or real estate to your children can potentially place your asset in harm’s way: children can, unfortunately, get divorced, get sued, and make bad financial decisions that get them in trouble with creditors. Any of those scenarios places your real estate at risk.
I’m also asked, “What about giving 1% of my property to a child – I heard that helps.” Well, there’s two answers to that question: 1st, co-owning property can have the benefit of allowing you to qualify for Medicaid benefits, without that asset being “countable” on the way into the program. However, that doesn’t protect the other 99% from liens (also know as Medicaid Estate Recovery). So, it’s a partial solution at best – and there’s other ways to protect your assets that work much better.
Basically, you can protect assets using trusts, or using deeds. There’s several different kinds of trusts, including asset protection trusts, and Medicaid protection trusts that can do the job. But these are “pre-planning” tools – meaning they are for people that are thinking at least 5 years ahead.
Deeds, on the other hand, can be used in more of an “emergency” situation where someone needs to protect property right NOW, because of an immediate medical situation.
We offer consultations to help you assess your asset protection and Medicaid Qualification needs.
Our ultimate goal is to help you achieve peace-of-mind when it comes to your preparedness for long-term care, disability, and death.