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Rising Star
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Has anybody transferred 401k to RRSP?
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This works in theory, and I’ve had clients do it — but there’s a big caveat: your mom needs to list your home as her primary residence in order to qualify for the senior tax freeze or homestead exemption. As long as you’re the one paying the property taxes, you can typically still deduct them, along with mortgage interest, on your income taxes. At least that’s how it works in most states.
But here’s the catch — if your mom already owns a home, switching her primary residence to yours can trigger some unintended consequences:
- She can usually only claim one primary residence, so she may lose any senior property tax freeze or homestead exemption on her own home.
- If she plans to sell her house, she could lose the $250K capital gains exclusion if she hasn’t lived there 2 out of the last 5 years.
- Her home may get reclassified as a second home or investment property, leading to higher taxes, insurance, or mortgage issues.
- And if Medicaid ever becomes relevant, it can complicate the 5-year lookback period — potentially making her home a countable asset.
So yes, this can work for property tax purposes — but it should be part of a bigger-picture plan that weighs tax, estate, and long-term care considerations.
Rising Star
Yeah, that’s definitely a good question for the attorney. Like I said, I’ve had clients go this route.
The main thing to keep in mind is that if your mom ever needs long-term care, and her assets are still over $1 million, she’d be expected to pay for it out of pocket. That’s doable short-term, but LTC facilities can run $150,000+/year, and if she ends up needing care for 3–4 years (which happens more often than people think), it can completely drain her assets, your inheritance.
It might be worth asking whether it makes sense to start moving some of her assets into a Living Trust now, and then eventually into an IRR Trust, so they’re protected and won’t count toward Medicaid eligibility down the line.
I’d also ask specifically about Medicaid estate recovery; which is where the state can go after someone’s assets after they pass (including things like their share of your house) to recoup what they paid for long-term care. A lot of people overlook that part, but it’s important to plan around.
This is all part of broader estate and asset protection planning and should be coordinated between her financial planner (if she has one), estate attorney, and accountant to make sure it’s done properly from both a legal and tax perspective.
But I’ve seen all kinds of things over the years. Like mom paying for you or your siblings’ kids’ college tuition, gifting money early to family, covering big expenses for grandkids or great-grandkids, or adding you and your siblings to her bank accounts to try to keep them out of the estate (even changing the tax responsibility).
Sometimes it’s paying for vacations or weddings, buying life insurance for grandkids, or helping with childcare or home renovations; all with the idea of slowly reducing her assets so she’ll “qualify” for help when the time comes.
Rising Star
You should talk to an estate attorney and a tax advisor. Regardless of the mortgage, if you only own half the house, you can’t deduct the interest on your taxes for the portion of the house you don’t own. Additionally, you will only be able to deduct half the property taxes. On the flip side, when your mother dies, her portion of the home will get a basis mark up. There may be better ways to handle this that an estate attorney can suggest.
Second the attorney in the event your mom needs elder care and a possible claim to the home etc
I have been investing in her HSA, Roth IRA and taxable brokerage. I have more than enough for her care to hire part time care if I’m around and around the clock care if something were to happen to me.
The biggest problem is that your mom owns half the house and if owned as tenants in common could pass that portion of the house to whoever she wants.
Might be worth going joint tenants with right of survivorship - only issue there is that your mother will own the entire house if you pre decease her.
Yup true. I didn’t say it was the only issue. First sent once said “biggest”. Everything is in that context.
Will your mother be living in the house with you?
There’s always a chance, but I’m 27 and she’s 64. She’s set to inherit some of my assets and would also inherit the house.
Your mom is getting older, if ever God forbids she will have to have a million $ surgery and her insurance won't cover it all they will sit on her home(her asset) and try to take it away( foreclose) saying that you might lose your forever home
I have interviewed many people and no one at the end of their life wants to be on a deed - just bc - there is no help for those who have something in this country,there is help for those who have nothing ( unless you pay for it of course from your own pocket)
Think about it twice before you make this decision