Handing down the home and managing the utilities

The house is often a parent’s biggest asset, and the bills that keep it running are a monthly worry. This guide explains, in plain English, the common ways a home passes to family, the traps to avoid, and how to help with utility bills without taking on the debt yourself.

Start here: three questions

1. Does your parent own a home? If yes, read the side-by-side table. If they rent, skip to utilities.
2. Do they want the home to pass without probate? Probate is the court process after a death. Look at transfer on death deeds and living trusts, and read why adding a child to the deed is risky.
3. Are they likely to need Medicaid for long-term care? Then timing matters. Read the look-back rules and Medicaid and long-term care before anyone changes a deed. The CFPB suggests calling the Eldercare Locator at 1-800-677-1116 for help.

Ways a home can pass on, side by side

The CFPB lists five ways to leave a home to children or heirs: a will, a gift, a sale, a trust, or a transfer on death deed. Here is how the common ones compare. Costs are only described the way official sources describe them.

A home can only follow one plan. The CFPB notes that TOD deeds aren’t allowed in many states. In Texas, for example, the law says a will can’t revoke or override a recorded TOD deed. Ask a lawyer how your parent’s documents work together.

Transfer on death deeds

A transfer on death (TOD) deed, sometimes called a beneficiary deed, names who gets the home when the owner dies. Using South Dakota’s law as an example:

• Your parent keeps full ownership while alive. The deed doesn’t affect their right to sell or mortgage the home, and it doesn’t give the beneficiary any rights until death (SDCL 29A-6-414).
• The beneficiary doesn’t have to be told, agree, or pay anything for the deed to work (SDCL 29A-6-409).
• It can be revoked (SDCL 29A-6-405).
• It must be recorded before death. In South Dakota, that’s with the county register of deeds (SDCL 29A-6-408). A deed that isn’t recorded in time doesn’t meet that requirement.

What a TOD deed doesn’t do

• It doesn’t protect the home from the parent’s debts. South Dakota law says the beneficiary can be liable for the deceased owner’s debts under certain conditions (SDCL 29A-6-420). Texas law similarly lets the estate’s representative reach TOD property if the rest of the estate can’t pay its debts (Tex. Est. Code 114.106).
• It may not protect the home from Medicaid estate recovery. Federal law lets states define the estate to include property that passes outside probate, such as through survivorship or a living trust (42 U.S.C. 1396p(b)(4)(B)). Minnesota’s law says property passed by a TOD deed is subject to claims, including Medical Assistance, if the rest of the estate isn’t enough (Minn. Stat. 507.071, subd. 3). Arkansas law also lets its Department of Human Services seek repayment from property passed by a beneficiary deed (Act 570 of 2021).
• It doesn’t override a co-owner with survivorship rights. Texas law, for example, says that if the parent owned the home jointly with right of survivorship and the other owner outlives them, the home belongs to the surviving owner (Tex. Est. Code 114.103(b)).
• It isn’t allowed everywhere. Check your parent’s state below.

Does your parent’s state allow TOD deeds?

Laws change, and new laws can take effect after a delay (for example, Maryland’s law took effect Oct 1, 2026). The state law has the final word. Some states use different names or have other tools, so a lawyer in the state can tell you what fits. Forms printed in a law are still only a starting point.

Why “just put the kids on the deed” can backfire

Adding a child to the deed feels simple. But it’s usually a gift of part of the home, and it can cause problems your family didn’t expect.

Medicaid’s 5-year look-back

Under federal law (42 U.S.C. 1396p(c)), when someone applies for Medicaid nursing home care or certain home and community-based services, the state looks back 60 months (5 years) for property given away for less than it was worth. A transfer can lead to a penalty period when Medicaid won’t pay for that care.

The law lists some home transfers that don’t cause a penalty, for example a transfer to the parent’s spouse; to a child under 21 or a child who is blind or disabled; to a brother or sister who already owns part of the home and lived there at least a year; or to a son or daughter who lived there at least two years before the parent entered a nursing home and gave care that kept the parent at home. These rules are detailed. Ask an elder-law attorney or free legal help before relying on one.

Gift tax paperwork

The IRS says a gift is any transfer where you don’t receive full value in return. For 2026, the annual gift tax exclusion is $19,000 per person. If your parent gives a child more than that in a year, including part of a house, the IRS says they generally must file Form 709, even if no tax is due. Most people won’t owe gift tax, because the IRS lifetime exclusion is $15,000,000 for 2026, but the form is still required.

A bigger tax bill when the child sells

This one surprises many families. The IRS says property received as a gift generally keeps the giver’s original cost (basis). Property inherited generally gets a basis equal to its fair market value on the date of death. So a child who is given the home during the parent’s life may owe more capital gains tax when they sell than if they had inherited it.

Your parent loses control

• A federally funded elder-law guide says that once someone is added to the title, the parent no longer has complete control of the property, including the right to sell or mortgage it on their own.
• It can be hard to undo. The guide says it’s difficult to take someone off a deed without their consent, and Philadelphia’s courts say a deed change can’t be undone unless the new owners agree.
• The CFPB says that after a gift, the home is no longer the parent’s financial safety net, and they may not be able to sell it or borrow against it.
• Property tax breaks for seniors or homeowners may be affected, depending on local rules.

The child’s debts become the home’s problem

The same guide warns that the added owner’s creditors may be able to reach their share of the home. The U.S. Administration for Community Living describes a real case: an older woman’s Social Security money was garnished from an account she held jointly with her son, because a creditor had a judgment against him.

Safer alternatives to ask about: the elder-law guide points to a financial power of attorney (so a child can help manage things) and, where the state allows it, a transfer on death deed.

Living trusts

• Revocable living trust: the CFPB explains that the person who makes the trust (the grantor) can name themselves as trustee, with a co-trustee or a successor trustee who acts when they can no longer make decisions. As long as they can still make their own decisions and the trust allows it, they can change or end it.
• Irrevocable trust: the CFPB says this can’t be changed after it’s set up, even if your parent changes their mind.
• A trust only covers what’s in it. The home has to be retitled into the trust (“funding” it). The CFPB says the trustee has no authority over property that isn’t in the trust, and the FTC warns that if the property isn’t properly transferred into the trust, the state will decide who inherits it.

Revocable trusts don’t protect against Medicaid

Federal law says that for Medicaid, everything in a revocable trust counts as a resource available to the person (42 U.S.C. 1396p(d)(3)(A)). For an irrevocable trust, any part that could be paid to the person counts. Any part that can’t be paid to them is treated as a transfer, which can fall under the 5-year look-back. Medicaid.gov also says money left in certain trusts may be used to repay Medicaid.

Watch out for living trust sales pitches

The FTC warns about companies that sell living trusts through seminars and in-home visits. It says some exaggerate the benefits, falsely claim a local lawyer will prepare the papers, take money for kits that never arrive, or use the visit to sell annuities. The CFPB also notes that trusts are sometimes marketed by unscrupulous people. Ask whether the seller is a lawyer, and don’t sign anything at the first meeting. See scams and red flags.

Helping with utilities without owning the debt

You can help a parent keep the lights and heat on without putting the bill in your name. Start by calling the utility, using the number on the bill, with your parent on the line.

• Account holder or helper? Ask the utility whether your parent can name you as someone it can talk to about the account, and whether that is different from being the account holder. Ask directly: “Would this make me responsible for the bill?”
• Third-party shutoff notice: ask whether the utility will send a copy of any shutoff notice to someone your parent names. In Minnesota, the Cold Weather Rule law requires a “third-party notice” saying the utility will send a copy of any future disconnection notice to a person the customer designates (Minn. Stat. 216B.096).
• Budget billing: spreads costs out so bills are the same each month. Minnesota law requires utilities to offer budget billing and payment agreements (Minn. Stat. 216B.098). Ask your parent’s utility what it offers.
• Medical protections: many states protect customers when a shutoff would endanger health. Minnesota law covers medical emergencies and life-sustaining equipment with a medical certification (216B.098, subd. 5). South Dakota rules postpone a shutoff for 30 days with a physician’s certificate, limited to a single 30-day period (ARSD 20:10:20:11).
• Winter protections: rules differ a lot by state. Minnesota’s cold weather period runs Oct 1 to April 30 (216B.096). In South Dakota, from Nov 1 to March 31 utilities must give an extra 30 days before shutting off a home (ARSD 20:10:20:10). For other states, check the state utility commission below.

Help paying: LIHEAP

The Low Income Home Energy Assistance Program (LIHEAP), run by the U.S. Department of Health and Human Services, helps eligible households with heating and cooling bills, energy crises, weatherization, and minor energy-related home repairs. To find the local office, call the National Energy Assistance Referral line at 1-866-674-6327, or use the LIHEAP Clearinghouse office finder.

HHS says LIHEAP doesn’t charge a fee for receiving a benefit and doesn’t give direct grants to individuals. If you get a message offering a LIHEAP grant or asking for a fee, contact the HHS Fraud Hotline at 1-800-447-8477.

Weatherization Assistance Program

The Department of Energy’s Weatherization Assistance Program (WAP) lowers energy costs for low-income households by making their homes more energy efficient. DOE says it’s run at the state and local level, so you start with your state’s weatherization office. Under DOE guidelines, households at or below 200% of the poverty guidelines, or that get Supplemental Security Income (SSI), are eligible, and states may use LIHEAP’s income rules instead. Priority goes to older adults, people with disabilities, and families with children, among others. Homeowners and renters can both apply. Use DOE’s How to Apply page to find your state.

Your parent’s state utility commission

Scams and red flags

• Deed and title theft: the FBI warns that criminals forge deeds (often quit claim deeds) to take over homes, and that some are family members targeting elderly relatives. It suggests checking property records regularly, signing up for title alerts with the county, and acting fast if property tax or water bills suddenly stop arriving. The FBI’s Internet Crime Complaint Center suggests asking whether the County Recorder or Register of Deeds offers a free notification service. Report it at ic3.gov.
• “Home title lock” offers: the FTC says “title lock insurance” isn’t title insurance and wouldn’t stop a thief from transferring a deed. It says you can check your title for free with your state’s land records office, and some areas have free alert programs.
• Living trust pitches: seminars and home visits that push a trust, a “kit,” or an annuity. See the FTC’s warnings above.
• Fake utility shutoff calls: the FTC says real utilities won’t demand immediate payment to avoid same-day disconnection. Scammers ask for wire transfers, crypto, payment apps, or gift cards. Hang up and call the number on the bill. Report it at ReportFraud.ftc.gov and to your state attorney general.
• Fake energy grants: HHS says LIHEAP doesn’t charge a fee for a benefit. A message offering a LIHEAP grant or asking for a fee is a red flag.

More help: scam phone calls and setting up a parent’s phone.

When to talk to a lawyer

Talk to a lawyer licensed in your parent’s state before anyone signs a new deed, sets up a trust, or gives away property, and especially if Medicaid may be needed in the next five years. Free and low-cost help:

• Free legal help for people 60 and older: the Older Americans Act funds legal services for older adults, including help with housing, public benefits like Medicaid, and financial exploitation. Find the local provider through the Eldercare Locator: call or text 1-800-677-1116, or visit eldercare.acl.gov.
• Legal aid: the Legal Services Corporation funds civil legal aid for low-income Americans and has a search to find the legal aid office near your parent.
• LawHelp.org lists legal aid and self-help resources by state: lawhelp.org.
• Lawyer referral services: the American Bar Association keeps a lawyer referral directory where you can find state and local bar associations’ referral services.

Bring the paperwork binder and the checklist below. Not sure who can make decisions if your parent can’t? Start with power of attorney. If a parent has died, see probate and small estates. If the home has a reverse mortgage, see what happens when they move out or pass away.