I had two relatives who gave away possessions and cash gifts in their later years. They also added other family members to the deeds of their homes before they passed. That enabled them to age in place, and neither one had excessive savings or assets to be disposed of in the end. That’s the model I am following.
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Good for them, but did they require in-home healthcare workers / caretakers at any point? Even if it’s only for the last 6 months or year of life that can eat through a ton of savings. It averages around $5k a month in the U.S., and will undoubtedly get more expensive as the average age of the population goes up and there are fewer healthcare workers to go around.
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One of them did, but the cost was minimal because of insurance coverage and family support.
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Everyone thinking of doing this should consult a qualified estate planner/tax lawyer prior to doing this. To determine their specific circumstances.
It’s completely fine in some scenarios. In others, when the extra family member eventually sells the house, it’ll look like they have a cost basis of the original house price. If that was 30 years ago and the price has substantially increased, they could be on the hook for a huge capital gain.
Which is a great example of large sums of money creating new problems. If you’re going to have problems, you could do worse than learning how to deal with large sums of money.
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We put the house and everything else including our business in a trust, it all transfers to our daughter one we both die. If for some reason our daughter dies before us we have a very close niece that we named as the trustee that will dispose of everything according to the will.
All done with a lawyer who set it up to give the least headache and tax bill to our daughter or whoever but we’re not even close to leaving her enough cash or home value that will create a tax headache.
My grandma, who owned the house her sister lived in, added my dad and his brother to the title while my grandma and sister were still alive. A right of surviorship was placed on the title. It made it very easy once both women died. It also solved the problem when long lost relatives of my aunt showed up wanting the house. Death and cash and property can sure create problems.
All done with a lawyer of course.
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