Estate-planning attorney Jerry Taylor warns against putting your home in your child's name to dodge Medicaid or probate. The strategy backfires: the house becomes vulnerable to your child's lawsuits, bankruptcy, or divorce. Safer alternatives exist that protect the property without the risk.
Putting your house in your kid's name, it seems like a good plan to avoid the nursing home getting it, to avoid probate, but it's not, and I'll tell you why. You are going to continue living in the home, but it's going to be in your child's name. So yes, if you can do that for 5 years, then you've avoided Medicaid. Medicaid will have no claim to that house. But what if your child gets sued? What if your child files bankruptcy? What if your child gets divorced and an ex-spouse gets a sizable award, you're going to be giving up part or all of that house. There goes your home. And the same thing applies if you do that for purposes of getting around probate. When you die, you are exposed to your child's liabilities. Now you say, Jerry Taylor Taylor, I've got a great kid, those things would never happen. But the idea is that you want to minimize the risk. You want to do away with that risk if you can, and there are better options available.
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