Westchester Attorney Anthony Enea on Transferring a Home to Loved Ones

For many older adults, transferring a home to children or other loved ones may seem like a simple way to protect assets and preserve a family legacy. However, according to elder law attorney Anthony J. Enea, managing partner of Enea, Scanlan & Sirignano, LLP in White Plains and Somers, N.Y., such decisions should never be made without carefully considering the potential tax, Medicaid, and estate planning implications.

“Whether a residence is transferred outright, with a retained life estate, or to a Medicaid Asset Protection Trust, each option carries its own advantages and disadvantages,” said Mr. Enea, who has spent nearly 40 years protecting the rights of seniors, the disabled and their families. “Careful planning is essential to ensure that a family’s goals are achieved while avoiding unintended tax consequences and preserving Medicaid eligibility.”

An outright transfer of a residence may subject the transfer to Medicaid’s five-year look-back period for nursing home Medicaid eligibility and could result in the loss of certain tax benefits, including STAR, senior citizen, and veterans’ exemptions. In addition, beneficiaries who receive property through an outright transfer generally inherit the original cost basis of the residence, which may lead to significant capital gains taxes if the property is later sold.

Another option is transferring the residence while retaining a life estate, which allows the homeowner to continue living in and using the property for the remainder of their lifetime. Although this approach may provide beneficiaries with a stepped-up cost basis upon the owner's death, it can create complications if the home needs to be sold during the beneficiary’s lifetime and may expose the property to the new owner’s creditors or unintended heirs.

According to Mr. Enea, a Medicaid Asset Protection Trust (MAPT) often offers the greatest degree of flexibility and protection. When properly drafted, a MAPT can help preserve eligibility for Medicaid, maintain certain tax advantages, and allow beneficiaries to receive a stepped-up basis upon the grantor's death, potentially minimizing future capital gains taxes.

“There is no one-size-fits-all approach when it comes to transferring a residence,” notes Mr. Enea. “The appropriate strategy depends on a variety of factors, including an individual’s long-term care needs, tax considerations, and overall estate planning objectives.”

Mr. Enea’s practice areas include wills, trusts & estates, elder law, Medicaid asset protection planning, estate tax planning, Medicaid applications (home care and nursing home), special needs planning, and guardianships (Article 81 and 17-A). An “AV” Rated Preeminent Attorney (Martindale-Hubbell, since 2002), he has been listed in “Best Lawyers in America” for fifteen consecutive years, recognized as a Best Lawyers “Lawyer of the Year” in White Plains six times, and named one of Westchester County’s “Super Lawyers” annually since 2007, including being a Westchester Top 25 Super Lawyer on numerous occasions.

Enea, Scanlan & Sirignano, LLP is located at 245 Main Street, Suite 500 in White Plains and 339 Route 202, Suite 100 in Somers. For more information or to schedule a consultation, call 914-948-1500 or visit www.esslawfirm.com.

About Enea, Scanlan & Sirignano, LLP

Enea, Scanlan & Sirignano, LLP is an AV preeminent rated elder law firm with offices in White Plains and Somers, N.Y. The practice concentrates on Elder Law; Medicaid Planning; Nursing Home and Home Care Applications; Estate Tax Planning; Wills, Trusts and Estates; Guardianships; Estate Litigation; Supplemental Needs Trusts; and Special Needs Planning. Enea, Scanlan & Sirignano, LLP serves Westchester, Rockland, Putnam, the Bronx, Manhattan, Long Island and Queens and is committed to providing the highest quality legal services to seniors, the disabled and their families. Visit the firm online at www.esslawfirm.com.