Mon, 23 February 2009
Home ownership has long been a large part of the American dream. Through the course of the 20th century, the percentage of Americans owning their homes rose considerably. In many of these homes three generations lived under one roof. Today, there still are many 3 generations homes. The reasons for it are the same. The grandparents often help care for their grandchildren while the parents are working. Sometimes the grandparents need assistance and can’t live alone any longer.
There is, however, a big difference between the households of the 20th century and those of the 21st century, which generation owns the home. The parent homeowner of the 20th century now is the grandparent homeowner of the 21st century.
Well, not so fast. If Jim doesn’t pay fair market value for the home then the uncompensated amount is treated as a transfer for less than fair value should Joe need Medicaid benefits in the next five years to pay for long term care.
Provided these contingencies are covered, however, the home transfer can work well. What happens, however, if Joe is not healthy when contemplating a transfer, but instead has dementia and already needs some care. In that case, the home transfer is a little more complicated but I’ll address that in the next week’s post.
Category:Long term care planning -- posted at: 6:00am EDT