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Choices for Transferring Your Home

to Your Heirs
While it’s natural for parents Place the house in a re-
to want to leave their home to vocable living trust.
their children, it’s critical that Pro: You retain full con-
parents look before they leap. trol of the property dur-
The method used to transfer ing your lifetime, and
a home can have unexpected pass it to the children af-
and not always welcome ram- ter you die.
ifications. It’s prudent to con- Con: Refinancing your
sult with a certified elder home can be difficult.
law/estate planning attorney Gift your house out-
to discuss the best options for Joseph S. Karp, right to your children.
your own situation. Below is C.E.L.A. Pro: You may derive
a summary of transfer techniques and satisfaction in knowing you’ve giv-
their pros and cons. en your children the home with no
Title your home jointly with your strings attached.
children with rights of survivorship. Con: Your children can do what they
Pro: Your children automatically in- wish with the house without your con-
herit the home when you die. sent, including sell it.
Con: You will need your children’s Con: You lose your homestead ex-
consent if you wish to sell, and you emption.
will be entitled to half or less of the Con: If your children sell the house
proceeds, depending on the percent- while you’re alive, they will pay cap-
age you and your children own, re- ital gains tax even though you would
spectively. have otherwise been entitled to a
Con: For Medicaid purposes, it may $250,000 capital gains exclusion for
be deemed a gift and create a period the sale of your primary residence.
of ineligibility Con: If your children sell the house
Deed your home to your children, after you die, they will lose the step-
reserving a life estate for yourself. up in basis, and have to pay capital
Pro: Your children own the home gains tax based on the original pur-
when you die. chase price.
Con: You will need your children’s Con: For Medicaid purposes, it may
consent if you wish to sell, and you be deemed a gift and create a period
will be entitled to a minor percentage of ineligibility.
of the proceeds, based upon the val- Do nothing.
ue of your life estate. Pro: The house will pass to your chil-
Con: For Medicaid purposes, it may dren when it goes through the probate
be deemed a gift and create a period court system.
of ineligibility. Con: Involvement in the court sys-
Place the house in an enhanced deed tem can be time consuming and ex-
(aka “ladybird” deed), retaining the pensive.
home for the rest of your life, with Joseph S. Karp is a nationally certified
and Florida Bar-certified elder law attorney
full rights to sell it or give it away (C.E.L.A.) specializing in the practice of Trusts,
while you’re alive. Estates and Elder Law. His offices are locat-
Pro: At your death, the children au- ed at 2500 Quantum Lakes Drive, Boynton
tomatically inherit the home. Beach; 2875 PGA Blvd., Palm Beach Gar-
dens; and 1100 SW St. Lucie W. Blvd., Port
Con: Some lenders and title insurance St. Lucie. Call him at 561-752-4550 (Boyn-
companies are uncomfortable with ton); 561-625-1100 (Palm Beach Gardens);
this arrangement, which may make it or 772-343-8411 (Port St. Lucie). Toll-free
difficult to sell or refinance. from anywhere: 800-893-9911. E-mail: KLF@
Karplaw.com. or website www.karplaw.com

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