Many people today are included in what’s referred to a “sandwich generation.” They are raising children of their own but also taking care of the needs of their aging parents.
When handling Medicare and other issues involving elderly parents, many worry about nursing home care and the costs associated.
They often wonder whether their parents will lose their home if they have to be placed into a senior care facility. Should they simply transfer title to their parent’s assets into a relative’s name?
A quick look Google search likely says yes. But the answer is no. Here’s why.
In the hopes of protecting assets, many people mistakenly transfer title to their home or other property to their children to avoid losing them.
But this should never be done for a variety of reasons. The transferee could get divorced or face financial hurdles and the property would thereby become vulnerable to creditors.
Rather than giving away property (which depending on the circumstances could be deemed fraudulent and illegal) aging parents can protect their assets by placing them in a trust.
Basically, a trust is a legal process whereby an individual places their property in trust to benefit another. A trustee then manages the property on behalf of the listed beneficiaries, or those who will inherit the property.
A common type is an irrevocable trust, one where property is transferred and cannot be revoked without the express consent of the trustee and the named beneficiaries.
But there are many other types available. An experienced estate planning lawyer can explain the varieties in greater detail as they pertain to certain circumstances.