Transferring your house to a child during your lifetime triggers capital gains tax on the appreciation. Instead, use a revocable living trust or will so the property gets a step-up in basis after you die, wiping out the tax and avoiding probate.
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. The same thing happens if you give it to them through a will, but with a trust, they avoid probate completely. If you want to fight me, let me know in the comments.
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