People sometimes try to protect their homes from nursing home costs and estate recovery by giving the home outright to their children. They plan to rely on their children to “do the right thing.”
Usually, a better option
is to deed the home so that it is owned by a trust rather than being owned by a
child. [The term trust describes the holding of property by a trustee (one or
more persons or a trust company or Bank) in accordance with the provisions you
create in a written trust instrument.]
Using a property protection trust, your property can be protected from estate recovery when you die, even
after a long stay in the nursing home. And since your child is not the owner of
the property it is protected from any bad things that may happen in your
child’s life as well.
A trust allows you to
protect your real estate (and other assets if you wish) from long term care
costs while avoiding the risks and negative consequences of outright transfers
to children. By transferring the home and other assets into a properly designed
trust, you can still reserve some interest in and control over the transferred
assets – advantages that are not available when transfers are made outright to
a child.For this estate planning is required.
When you transfer the
things you want to protect to the trust you don’t have to sell them. You don’t
have to change your investments. What
you own now is merely moved under the protective umbrella of the trust. The trust can sell things held by it, and buy
new things. If your home is held under the trust, and you decide to move, the
trust can sell it and buy a new one.
Most people don’t even notice the trust once
it has been set up. It changes things
just enough to protect your assets from nursing home costs, from issues with
your children, and from the risks involved when a surviving spouse
remarries.
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