Generally it’s not a good idea to put your childrens’ names on your deed, or to give bank accounts to children. That can cause tax, creditor and other problems that you should avoid, as explained by Dennis Toman, Certified Elder Law Attorney.
So often when people are trying to protect assets for Medicaid, they think of putting the house or putting the bank accounts in their child’s name. And almost in every circumstances, that’s not a good idea if we’re planning ahead.
Now, if we’re in a crisis situation, sometimes that’s exactly what we will do. We will go ahead and use a particular type to protect the real estate, to make sure that it is not subject to Medicaid estate recovery, that Medicaid can’t get a lien on that and force the sale later on.
But when we’re planning ahead, generally we don’t want to put assets into a child’s name. There’re a number of reasons for doing that. I’ve seen so many horror stories that when it has been done, somebody else has done that, come in and told me about it and say, “How can we fix this? So many horror stories that I don’t advise this.
What happens if the child becomes disabled? What happens if the child dies? What happens if the child has debts? What happens if the child divorces?
You know, over 50% of marriages end up in divorce, and when you put your real estate, home place into your child’s name, you’re not only making a gift to that child, you’re also making a gift to your son-in-law or daughter-in-law. And how many people have in-laws that they think of as outlaws? Well, in that circumstance, when you added a child’s name on the deed and you later want that property back, or you want to sell that property, or that child goes through divorce, there are all kinds of bad things that can happen if you don’t have a cooperation of both your son and daughter-in-law or your daughter and your son-in-law.