“Information Bits from the Boss: Samantha provides brief answers to clients frequently asked questions”
What if I transfer all my assets to my children?
In Pennsylvania there is a five-year lookback period for long-term care purposes, which means if you transfer assets to any individual without adequate consideration, whether outright or in a trust, those assets available to pay for your long-term care costs for up to five years after the transfer. The lookback period depends on the value of the asset that you transferred. The maximum lookback period that you can have in Pennsylvania is five years. If you transfer assets to your children and eventually need long-term care, then there is a financial obligation for those children to pay for care up to the amount of the gift that was transferred to them. I always encourage clients to think about what those ramifications are to their family and whether they actually want to make those gifts. The other thing that you have to realize is if you transfer the assets to your children then that means that your children are in control. For example, if you transfer your primary residence, the child could evict you from your home. Also, if you transfer assets to your kids, those transferred assets are subject to any of your children’s creditors (divorce, car accidents, debt), and if your children predecease you, then those assets are subject to Pennsylvania inheritance tax. Additionally, if the assets are owned by your children, and they predecease you, those assets would be distributed by your children’s last will and testament. That would mean that you are not guaranteed to get those assets back unless your children updated their will to specify that. If you have additional questions, please contact our office.
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