How can I transfer property to my kids while retaining income rights?

Full question:

I would like to make out a form for the 5 year period so that they cannot take my property in case I become ill. However, I want the right to get the income from the property until I become disabled. I need to put my property in my kids name, so, how do I do this? Also, I had a tenant that left me with a large bill and need to get my money from her; so, how can I get a garnishment or something to get my money?

• Category: Medicaid
• Date: 04/07/2025
• State: Nebraska

Answer:

To protect your property from being taken if you become ill, you should be aware of the 60-month look-back period for government nursing home assistance programs. This means that any transfer of assets for less than fair market value within the past five years can affect your eligibility for assistance. Under the Deficit Reduction Act of 2005, if you transfer assets, you may face a penalty period during which you will not qualify for Medical Assistance for long-term care.

For every $4,300 you transfer, you may be disqualified for one month of coverage. The penalty period begins on the first day of the month after the transfer or when you become eligible for Medical Assistance, whichever is later. If you give away property multiple times, the second penalty does not start until the first one ends.

Transferring your home to certain family members, such as a spouse or a disabled child, does not impact Medicaid eligibility. However, creating a life estate deed without the power to sell may be considered a disposal of resources and could disqualify you from assistance. If you create a life estate deed with the power to sell, it is not a disposal, as you retain the ability to sell the property.

To transfer property, you will need to execute a deed that names you as the grantor and your children as grantees. This deed must be signed, notarized, and recorded in the county where the property is located. You can use either a warranty deed, which guarantees ownership, or a quitclaim deed, which transfers only the interest you have in the property.

Regarding the tenant who left you with a bill, you can file a breach of contract action in court to recover your money. If you obtain a judgment, you may be able to enforce it through garnishment or by placing a lien on the tenant's property. A judgment lien can be filed if you have a court judgment against the tenant for unpaid debts.