Should You Give Your Home to Your Children? 

The question of transferring property, especially your home, to your children is a hot topic in the world of elder law and estate planning. Many people contemplate this move as a way to shield their home from potential nursing home costs or to simplify estate planning. However, there are significant personal and financial ramifications to consider before making such a decision. 

What Happens When You Transfer Your Home Ownership 

When you transfer your home to your children, you relinquish legal ownership. The deed will list your children as the new owners. This means you lose your right to sell the home or to recoup it if familial relations sour, a situation that isn’t uncommon, especially when in-laws are involved. 

Financial Risks of Transferring Home Ownership to Children 

Handing over your home to your children can expose the property to their financial issues like bankruptcy and divorce. In addition, you forfeit your right to specify in your will or estate planning documents how the home will be distributed upon your death. 

Impact on Government Benefits and Taxes 

Transferring your home can result in the loss of valuable government benefits. For example, in Pennsylvania, programs like the Property Tax Rebate Program and the Homestead Tax Exemption require you to hold an ownership interest in your property. Additionally, while homeowners can often exempt themselves from Capital Gains Tax, your children won’t be eligible for this benefit if they sell your home without residing in it. 

Asset Protection Trust: A Safer Alternative 

Given the pitfalls of transferring your home directly to your children, a better alternative may be the use of an Asset Protection Trust. These trusts offer a way to shelter your home and other assets while ensuring you can reside in the property for the rest of your life. Importantly, trusts provide flexibility in altering beneficiaries and are often more protected from your children’s potential financial misfortunes. 

In Summary: Should You Transfer Your Home to Your Children? 

In most cases, the cons outweigh the pros. An Asset Protection Trust provides a safer and more flexible avenue for estate planning and asset protection.

Matthew J. Parker, Esquire, specializes in elder law at the law firm of Marshall, Parker & Weber, LLC, with offices in Williamsport, Jersey Shore, and Plains. For more information, visit or call 1-800-401-4552. 

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