This question, in its various forms, is a regular question amongst most elderly people. The question is short and straight forward. The preparation of the deed (Quitclaim Deed) is easy and fairly inexpensive. Not discussing the potential implications of such a simple transaction with an attorney prior to transferring the property may be the most expensive mistake you ever make. Here are some examples of unanticipated complications that can occur when transferring your home to a child or children:

1. After the transfer, your child loses his/her job and cannot find work. He/she gets into debt and the creditors sue him/her for collection. The creditors obtain judgments against him/her and then lien what is now his/her house. They foreclose and evict you. You have no place to live;
2. Your child gets hit by a truck and will never work again. He/she will need medical care the rest of his/her life. He/she needs to apply for Title XIX. The house is now one of his/her assets that must be sold and the money must be used to pay for his/her care. You have no place to live;
3. Child, at the time of the transfer was happily married. Subsequent to the transfer, spouse files for divorce. The house is an asset of the child’s that was acquired during the marriage. Spouse claims half of it is his/hers. You may have no place to live;
4. Child, at the time of the transfer was happily married. Child unexpectedly dies and leaves the house to spouse. Spouse doesn’t like you so he/she evicts you. You have no place to live;
5. Within five years of you transferring the house to child, you need Title XIX for yourself. Now you need child to return the house to you which he or she may or may not be willing to do. Worse yet, child mortgaged the property and spent the money or does not have access to the equity due to creditor liens. You will incur penalty periods during which Title XIX will not cover your care and you have no money to pay for it;

Generally speaking, transferring your house outright to your child or children is not a good idea. If you insist on doing so, one option sometimes recommended is for you to reserve a life use in the property so you have some control on what happens to it and you. There are other potential mechanisms to protect your asset, but all have their pros and cons. It is always wise to consult an attorney before making a decision about what to do with probably your largest asset. More importantly, you should probably consider a global estate plan which will include not only your house but all of your assets. Keep in mind, if you have already implemented an estate plan, the deed may take your house out of your plan and possibly cause other consequences to your estate plan that you did not intend. Again, the benefit of an attorney is not only in the preparation of what appears to be a fairly simple document, but more importantly, in his/her explanation to you of your various options and the pros and cons of each so you can make an informed decision. 

“When results matter, experience counts” 

By: Louis A. Crisci, Jr.