Not to your child

9 Jan 2026 · 1 min

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0:36

In this short advisory monologue, the speaker warns against transferring a primary residence to a child—whether by adding the child’s name to the title, gifting the property, or selling it for a nominal amount—to avoid probate or Medicaid recovery. While such transfers may sidestep probate, they create a significant capital‑gains tax liability because the child inherits the donor’s original cost basis. Using the example of a house bought for $250,000 that later appreciates to $450,000, the speaker explains that the child would owe tax on the $200,000 gain. The recommended solution is to place the house in a revocable living trust, which allows the property to pass to heirs at death with a stepped‑up basis, eliminating the capital‑gains burden. The speaker invites viewers to challenge the advice in the comments.

Chapters

Do not give your house to a child. Do not add your child's name to the title. Don't get cute and sell your house to your child for a dollar. I understand you're trying to get around probate, you're trying to avoid Medicaid recovery, but there's another problem looming: capital gains tax. If you bought that house for $250,000, gift it to your child, now it's worth $450,000, and they're going to be responsible for the capital gains tax on $200,000. What's the answer? Revocable living trust. Put that house in a revocable living trust, leave it to your kids, When you die and they inherit it, they will inherit it tax-free. You wanna fight me? Let me know in the comments.