my older son is buying my house and the younger is getting my insurance policy when i die. it isn't exactly even but i have been through enough arguments with them so i have conceded. my younger son wants the house if my older one dies first, instead of my older sons son, as he is not responsible. what paperwork does my son need to do that? Would a will be sufficient or does he need a trust, revokable or irrevokable? I am 69 and hopefully i will make the 5 yr waiting period. Jinnie
I hope you can find a less complicated way to honor your sons equally.
If it is whole life policy, is it at the point that there is there a cash value? and if there is a cash value is it payable now in full?
How Is son # 2 getting the policy - like is he just the beneficiary or is he becoming the owner of the policy. The owner of the policy is responsible for paying on it and if they don't the policy will cancel - so keep that in mind if this son is not financially responsible. The actual value of the policy now and then after death will make a big difference in the equalness of what the son's get. You really should get the policy out and talk this over with an investment advisor who hold insurance license so that you and your sons understand how the value is done.
For Medicaid, if there is a cash value on a policy you own, it has to be spent down for Medicaid as cash value is an asset. So if son # 2 is just a beneficary on a whole policy, that money will have to be paid on your care before Medicaid will.But if # 2 owns the policy, then it is not your asset for the Medicaid application.
Are you selling the house for less than what it is worth? Is that the issue -- that Son1 is getting a "gift" now, and Son2 is not? Can you afford to give Son2 an equivalent gift now, not the full value of the house but the "discount" you are giving Son1? Otherwise things aren't equal until Son1 dies.
Is there any mortgage on the house? Do you intend to continue living in it?
I really think you would be best served by discussing your goals with a certified financial planner or an Elder Law attorney. This is something you don't want to make any mistakes about!