Elder Law Attorney Answers Question on Gifting Home and Assets

As our parents age, many of us are faced with the question of what to do with their assets. Should we encourage them to gift their house or other assets to us, their children? Should we make bank accounts joint with our parents? These are important questions to consider. It’s essential to seek the opinion of an estate planning attorney or elder law attorney before making any decisions. In this blog, we’ll explore the pros and cons of gifting assets and making bank accounts joint with children and explain why seeking professional advice from an experienced probate lawyer is crucial.

The Importance of Estate Planning and Elder Law

Elder law and estate planning are essential for ensuring your assets are protected and allocated in accordance with your wishes. Estate planning involves designing a plan to distribute your assets after your death, while elder law addresses the legal and financial issues that arise as we age. Estate attorneys and elder care lawyers can guide you in creating an in-depth plan that concentrates on your precise needs and goals. Furthermore, they can also advise you on the most effective ways to protect your assets and fulfill your wishes.

The Risks of Gifting Assets to Children

Many people consider gifting assets, such as their homes, to their children to avoid probate and reduce estate taxes. However, this strategy has significant risks. First, gifting assets to children means you no longer have control over those assets. Once the gift is made, it belongs to your children, who can do whatever they want. This can be problematic if your children are not financially responsible, get divorced, or face other legal issues. Additionally, gifting assets can have significant tax implications. If the value of the gift exceeds the annual gift tax exclusion, you may be subject to gift taxes. Consequently, if your children sell the gifted assets, they may be subject to capital gains taxes. 

The Risks of Joint Bank Accounts

Another common strategy for avoiding probate is to make bank accounts joint with children. While this may seem simple and convenient, it can also have significant risks. First, making a bank account joint with your children means they have equal access to the funds in that account. This can be problematic if your children are not financially responsible or face legal issues.

Additionally, making a bank account joint with your children can have tax implications. If the account earns interest, your children may be responsible for paying taxes on that interest, even if they do not withdraw the funds. In Pennsylvania, joint bank accounts are presumed to be right of survivorship, meaning that only those listed on the bank account with you will inherit the account. In other words, they will not pass according to your will. 

The Benefits of Seeking Professional Advice from an Estate Planning Attorney

Given the risks associated with gifting assets and making bank accounts joint with children, seeking professional advice from an estate planning attorney is essential. An experienced estate lawyer can help you better grasp the potential consequences of gifting assets and making bank accounts joint with children. Moreover, they can provide guidance on alternative strategies for safeguarding your assets and ensuring that your wishes are carried out. 

Alternative Strategies for Protecting Assets

There are several alternative strategies for protecting your assets that do not involve gifting assets or making bank accounts joint with children. These include:

  • Trusts: A trust is a legal arrangement in which a trustee holds and manages assets on behalf of a beneficiary. Trusts can be revocable or irrevocable. They can protect assets from creditors, avoid probate, and reduce estate taxes. A trust attorney can provide guidance.
  • Life Estate Deeds: A life estate deed is a legal document that permits you to transfer ownership of your property to your children while retaining the right to live in the property for the rest of your life. This approach can help you avoid probate and reduce estate taxes.
  • Long-Term Care Insurance: Long-term care insurance can help preserve your assets if you require long-term care. This type of insurance may cover the expenses of nursing home care, assisted living, and in-home care. 

The Role of Estate Lawyers and Elder Law Attorneys

Estate planning lawyers and elder law attorneys play a vital role in assisting individuals and families interested in protecting their assets and ensure that their wishes are carried out. In particular, they can provide guidance on the best strategies for protecting assets, reducing inheritance and estate taxes, and accomplishing your estate goals.

Estate planning and elder law lawyers can also help you create a comprehensive plan that addresses your specific needs and goals. They can provide counsel on the best ways to protect your assets and ensure that your wishes are carried out. 

Conclusion

As our parents age, it’s natural to want to safeguard their assets and ensure that their wishes are carried out. However, gifting assets and making bank accounts joint with children can have significant risks and tax implications. It’s essential to seek skillful advice from an estate planning attorney before making any decisions. To clarify, an elder care lawyer can help you understand the potential outcome of gifting assets and making bank accounts joint with children and provide guidance on alternative strategies for protecting your assets.

By working with an experienced trust attorney or elder lawyer, you can create a comprehensive plan that addresses your specific wishes. One that ensures that your assets are protected and distributed according to your wishes.

Contact a DKY Elder Law Attorney Near Me

Contact The Distasio, Kowalski & Yelen Law Firm (DKY Law) if you are looking for an “estate attorney near me” or for a Pennsylvania estate attorney or Wilkes-Barre estate lawyer.

Tap to learn more about Wills, Trusts, and Estate Planning.

 

Jeffrey A. Yelen, a partner with DKY Law Firm, is an Elder Law Attorney who brings 25 years of estate planning, probate and estate litigation experience to the clients he serves. He is head of the firm’s Elder Law and Estate Services division and is highly experienced in Wills, Estates, and Trusts.  When you are searching for an Elder Law Lawyer, Attorney Yelen can provide the skilled legal representation you and your family need. Contact Attorney Yelen.

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