Many people try to take steps to avoid costly taxes when they are engaging in Arizona estate planning processes. One example of this is taking larger assets and transferring them or selling them to avoid probate or other costly taxes associated with a person’s estate. There are several reasons why it is never a good idea to transfer your home into the hands of your children or another family member as a long-term care planning tactic. These reasons include:
- An increase in property taxes: Those discounts that you may have enjoyed having a house as a senior will disappear if you transfer the deed of your home into your children’s names. This might negate any long-term financial preparation you’ve done associated with Arizona estate planning.
- The liabilities of your children can come back to you: If your children undergo legal issues that cause their assets to be utilized to take care of the problem, you may end up with a bigger problem on your hands than you know. If the home in which you live is in their names, then you could lose your home in a bitter divorce or financial settlement involving your children as a result. This definitely sets you back in the Arizona estate planning process, because the home in which you worked so hard to buy and pay for can be gone like that, causing you to have to start over.
To avoid any of this happening or other financial problems, the best thing you can do for long-term care planning is to set up a trust account to manage your assets down the road. This is a core part of the Arizona estate planning process and allows you to re-title many of your major assets into an account that ensures that your wishes are followed should you fall ill or pass away. Moreover, trust accounts protect your most important assets, so that you don’t have to continue to incur financial penalties as you age and start to build a nest egg that will keep you comfortable for the rest of your life. This also takes the pressure off of your children, so that you don’t even need to ask them about transferring the deed of your home into their names, which means they won’t be responsible for your home should something happen to them with a negative financial impact.