Home is where the heart is. Our homes are very personal to us. One concern that many people have when they talk to me is how to protect their home from nursing home costs. They’re concerned that their home will be taken from them to pay for the nursing home.

First, let’s dispel with the myth that your home can be taken from you to pay for nursing home costs. That can’t happen. However, your home is a “Countable Asset” that would need to be sold so you can spend the net proceeds on your care. So a common concern is how to protect the home.

One of the first questions that many people will ask is whether they should transfer their home to their children? The answer can be a little complicated. Eventually this may be a good idea, but most often the answer is “not now” and “not directly to them.” As part of a larger plan, transferring a home to an adult child may be a very good option, but a direct transfer can have significant negative consequences.

Problems with Transferring your Home

While transferring your home might be a good idea, here are some of the reasons why transferring your home directly to your children can be a bad idea:

• You lose control of your home
• All of your child’s debts and liabilities are attached to your home, both now and in the future
• A transfer can actually make it harder to be able pay for care
• Your insurance costs could increase
• You could lose your homestead exemption
• A transfer could cause significant capital gains taxes when your child goes to sell the home later
• A transfer could cause family jealousy and infighting

These are just the most common issues that could arise. There are a number of other potential problems that could be specific to your situation. So while transferring a home to a child may seem like a good option, it may be the worst idea.

Alternatives to Transferring your Home

There are a number of tools available for protecting a home or other assets from the cost of long term care. These can include:

• in-home care by a child,
• a Care Contract,
• Gifting,
• Annuities,
• Long Term Care insurance, and
• Irrevocable Trusts.

Every situation will be different depending on a person’s specific assets, family relationships, and goals, and an experienced elder law attorney can help you create a customized plan to protect your home, your other assets and your loved ones. If you need help with planning for a long term care stay for yourself or a loved one, click this link and request a no-cost initial appointment with attorney Tim Alley.