The answer to this question is usually no! My office has been involved in estate planning for more than 45 years. A common question presented to me by clients deals with their desire to put their house, stocks, bonds and/or other assets in their children’s name. When this occurs I discuss with the prospective client their inheritance scheme which usually involves having their children inherit their assets after they die. I usually try to dissuade my clients from putting their property in their children’s names while they are still alive. With the exception of Medicaid planning techniques, this is usually a bad idea. Even involved in Medicaid planning situations, I do not advise my clients to put their property in their children’s names. I suggest they put their property in the name of a trust.
Reasons For Not Putting Property in Children’s Names
There are numerous reasons why putting assets accumulated during a lifetime in a child’s name before you die is a bad idea. Putting your property in a child’s name or creating a joint ownership situation with the child may cause your property to be subject to being lost in a divorce proceeding between the child and his or her spouse. In addition, the property could be seized or have a lien placed against it if your child doesn’t make his income tax payments to the Internal Revenue Service. If your child does not pay their credit card bills and gets sued, the creditors can end up with liens against your property which can destroy the equity in real estate. If you put a child’s name as a joint tenant on your bank account and that child has a judgment against him or her, the creditor’s attorneys can place a lien on the bank account and seize the money in the account.
Even though you love your child, if your child has financial problems, he or she may force you to sell your house and share in the proceeds from the sale. Your child could also move back into the house with his family and take over the residence.
Control of Your Assets
Most individuals who work hard to accumulate assets want to control their assets. Controlling one’s assets gives individuals a sense of self respect and dignity.
Draft a Will or Trust
Utilization of wills and/or trusts in estate planning will accomplish all of your goals concerning seeing to it that your assets are turned over to your children in the event of your death. Wills and trusts can also be utilized to minimize taxation with regard to State and Federal inheritance taxes. In addition, estate planning can be undertaken by your attorney to see to it that assets aren’t depleted in the event you have a need to go into a nursing home or need home health care aides to help take care of you.
Elliot Schlissel is a member of the National Academy of Elder Law Attorneys. He has been representing clients with regard to drafting wills and trusts, probating wills, and helping clients with estate planning and Medicaid planning issues for more than 45 years. The office can be reached for a free consultation at either 516-561-6645, 718-350-2802, or 1-800-344-6431.
