Q: Should my parents put their house in my name?

Q: My parents are in their early 70s and in fair health and want to put their house in my name now to protect it. Is this a good idea for both of us.

A: This is something you should sit down with a local estate/elder lawyer and discuss. There are pros and cons. Pros-it reduces inheritance tax. 1) If they transfer title to you, there is no need to have the house part of the estate when the surviving parent dies. 2) You may avoid a Medicaid lien if the surviving parent never needs to apply for Medicaid within 5 years of the transfer. Cons-inheritance tax is not much for children (4.5%) so depending on the size of the estate it may not be that big of a savings. If the surviving parent needs to apply for Medicaid within 5 years of the transfer of the house for no consideration, this can give rise to Medicaid eligibility problems. Also, the parent loses control of what is often their most valuable asset which they may need to liquidate for money in order to afford a better nursing home. If the home is transferred totally out of the parent’s names, in Allegheny County, they will lose senior citizen real estate tax discounts. Just putting you on the deed with them will not result in a loss of senior citizen’s discounts. In addition, if title is transferred to you, and you subsequently sell this home, you will lose the benefit of the stepped up value you would have had if the transfer came from the estate to the buyer and you will have a full capital gains tax minus allowable deductions. There is more to this than you think, so I advise your parent to seek a legal opinion.

If you feel like this issue relates to you, or a problem that you are experiencing, please contact me so that we can discuss your situation.