Estate Planning For Aging Parent (1 Viewer)

[No. 4]

Looking for any insight on estate planning for aging parents. My mom is 66 and lost her husband a few months ago. She has been showing signs of early onset of Alzheimers, so I am working with her to try and get her affairs in order. I am comfortable drafting the power of attorney forms, living will, etc. However, I have questions on signing her house over to me to protect it in the event she needs Medicaid funded nursing home care. If she signs the deed over to me now, 5 years need to pass before the state can't touch it. Also, I believe I have to pay capital gains tax if I ever sell the house.

Any ideas on how this works? We are in Wisconsin. TIA.

 

[Deepster]

I just went through a lot of this with a parent who had COPD. Set up an appointment with an elder law attorney. Talk to them about an irrevocable trust for her current assets where you'd be the executor of the trust.

I don't know the specifics to Wisconsin, but for me, I was told that...

a) If you set up a trust, that 5 year window begins. If you get past that without needing any state assistance, that money is then free and clear and can't be touched.

b) If you set up that trust and, within 5 years, she needs state assistance, they'll start to drain her assets from the easiest to the hardest to liquidated (savings accts, then house and cars, etc).

c) If she signs over anything to you and it's within that 5 year lookback, you're responsible for the money.

Also....

a) Living wills and power of attorney only apply when she's alive and incapacitated. Once she passes away, those documents are inapplicable.

b) She can put your name on bank accounts right now so you have access to them and don't need probate when she passes away.

Tie up as many of the loose ends as you can now. Being on hold waiting for customer service, then not getting an answer, sending in forms, faxing death certs, etc, etc, etc are a royal PITA. And that doesn't count probate and the paper needed there. Good luck. And, I am obviously not a lawyer so only take this directionally. Definitely go see an elder law attorney for a consultation.

 

[eoMMan]

Looking for any insight on estate planning for aging parents. My mom is 66 and lost her husband a few months ago. She has been showing signs of early onset of Alzheimers, so I am working with her to try and get her affairs in order. I am comfortable drafting the power of attorney forms, living will, etc. However, I have questions on signing her house over to me to protect it in the event she needs Medicaid funded nursing home care. If she signs the deed over to me now, 5 years need to pass before the state can't touch it. Also, I believe I have to pay capital gains tax if I ever sell the house.

Any ideas on how this works? We are in Wisconsin. TIA.

You're correct on the capital gains tax.

You are much better off keeping the house in her name and then when she passes, you inherit it.

 

[No. 4]

Looking for any insight on estate planning for aging parents. My mom is 66 and lost her husband a few months ago. She has been showing signs of early onset of Alzheimers, so I am working with her to try and get her affairs in order. I am comfortable drafting the power of attorney forms, living will, etc. However, I have questions on signing her house over to me to protect it in the event she needs Medicaid funded nursing home care. If she signs the deed over to me now, 5 years need to pass before the state can't touch it. Also, I believe I have to pay capital gains tax if I ever sell the house.

Any ideas on how this works? We are in Wisconsin. TIA.

You're correct on the capital gains tax.You are much better off keeping the house in her name and then when she passes, you inherit it.

My fear was confirmed above. If she needs state Medicaid, then her assets may be liquidated before I inherit anything.

Will seek legal counsel.

 

[No. 4]

Talked with a law office. They can handle all of this, for a fee of course. They would not provide tax advice, though. They suggested talking to an accountant on the capital gains tax. In the end, I want to protect her assets from the state in the event she goes into a nursing home.

Any other suggestions from the night crowd?