At times we hear from seniors who want to give their assets to their children, although the seniors need the assets themselves. Recently, I had one such case.
Our client was an elderly woman, in her late 80s, with limited income who owned a house and a vacation cottage. She had several children, but was particularly attached to her middle son. Her house needed major repairs, but she did not have the money to pay for them. Instead of selling the cottage to finance repairs on the house, she planned to get an equity loan against her house from a bank, and give the cottage to her middle son. She had planned to leave the cottage to the middle son upon her death. Her motivation for giving it to him early was pressure from the bank. The bank would not give her the equity loan while she had the expenses of maintaining the cottage.
I advised the client not to give the cottage to her son, because of the adverse effects on herself. First, she needed to sell the cottage to get the money to repair her home, and avoid having to make loan payments from her limited income. Second, if she gave away the cottage, and had to apply for Medicaid within 5 years (e. g. to pay nursing home costs), she would probably be denied Medicaid due to divestment.
The client was not eager to take my advice, but agreed to consider it. To take my advice would put her in an awkward situation; she had promised to leave the cottage to the son.
These cases are awkward to deal with. Some seniors will go to excessive lengths to please their children. On the Legal Hotline, we need to advise them not to do this. Our advice will probably create fear of a breakdown in the relationship with the children, but in the end, it is in the seniors best interest.
If you or a loved one as unsure of how to handle issues like this or other legal questions, please contact the Legal Hotline for Michigan Seniors at 800.347.5297 and our hotline attorneys will be happy to assist you.