Q: A parent has a trust with 2 beneficiaries. Give a house to one kid now and give half the value to the other.

A: Giving the house to one beneficiary now could have many unintended negative consequences such as loss of step up in basis at the death of the gift giver and a hefty Medicaid penalty period assessed against the gift giver on account of the lifetime uncompensated transfer.

This is not the best forum to sort out the many issues presented here. Rather, you should schedule a consultation with an experienced elder law attorney in your area. I would recommend that you search for an attorney who does Medicaid pre-planning. Even if you are not really concerned with how to pay for long term care in the future, such an attorney will still be conversant with all of the issues presented by the scenario you describe and can recommend the best approach to your particular situation.

A: To achieve the goal of giving the house to one child while ensuring the other receives half the value, you can establish a separate trust for the house with only the first child as the beneficiary. Next, obtain an appraisal of the house's 2024 value. This ensures you have a clear, documented value for reference.

To protect the interests of the second child, you can structure the original trust to include a provision that ensures they receive half the 2024 value of the house. This could be accomplished by setting aside liquid assets within the original trust or creating a legally binding agreement that obligates the first child to pay the second child half of the appraised value if the trust lacks sufficient funds.

Consult with an attorney to draft the appropriate trust amendments and agreements to ensure the plan is executed according to your wishes. This will help avoid disputes and ensure both children are treated fairly based on your intent.