What are the advantages or disadvantages of adding my name to my father's home?
First doublecheck the trust document. The prime reason most people set up living trusts is to pass valuable assets free from probate—and their houses are usually included as one of the most valuable assets they possess.
If the house is covered by the trust, there is no reason for you to be on the deed, too, since the house will automatically pass to you as the trust beneficiary.
If for some reason the house is not covered by your dad’s trust, encourage him to add it, as that would be the most efficient and least costly way to arrange for it to pass to you.
The Senior Editor's comments are correct. However, there are other potential issues you may want to evaluate.
The Deficit Reduction Act passed into law Nationwide February 8,2006 created a new 5 year look back rule. This means transfers of property in any manor is subject to the 5 year look back. This is significant should your father ever require nursing home medicaid assistance. In such cases the nursing home and other creditors could lay claim to his home if a potential transfer of a property was inside the new 5 year window. Make sense?
Further the Deficit Reduction Act created an opportunity for Seniors to create an Irrevocable Funeral Trust. In this Trust a Senior can put up to $12,500 for final expenses etc that CAN'T be touched by Nursing Homes or other creditors.
Unfortunately, 85% of us will end up in a Nursing Home somewhere along the way. The average monthly costs of a Nursing Home Residence Nationally is $7,000. What that means to most Seniors is, if they are confined to the Nursing Home long enough their Life Time of savings will swallowed up by the Nursing Home. Hence, the importance of planning ahead.
We recommend you check with a Senior Law Attorney for further information concerning this and other issues included in the Deficit Reduction Act...
You can see further helpful information on the Irrevocable, Revocable and Family Trusts by going to: www.seniortrustadvisors.com
Hope this helps, Duane Henneman Senior Trust Advisor
