Vacation home transfer to children


Elderly healthy man (85), divorced remarried (first wife deceased), resident in DC (he and current wife co-owners of house there), has a vacation house (from first family) in DE. The man and his first wife became joint owners of the DE house upon the divorce; the man assumed sole ownership when first wife died. There is no income from the DE house. The mortgage is paid off. The man wants to transfer ownership of the DE house to the children of his first marriage. His other assets, including his share of the DC house, will go to his second wife. There are no children from the second marriage. The DE house is currently in a revocable trust, with the children as trustees.

The man is considering a transfer of ownership of the DE house now, hoping that he will stay healthy through any Medicaid reporting period. But he’s not sure about the best method of transfer, or the possibilities for the children to “cure” the gift if he should require long-term care during the lookback period. The options are:

– outright gift;

– life estate;