The easiest and cheapest option is a transfer on death deed. It avoids probate, is tax-advantaged over gifting the home, and costs little. But no method is completely safe from challenges, creditors, or Medicaid estate recovery. Which risks matter most depends on her health and finances.
What Is a Transfer on Death Deed?
A transfer on death deed names who gets the property when she dies. Until then, she keeps full control. She can sell, mortgage, or change the deed at any time.
Her son gets the property after she dies without going through probate. The deed must be notarized and recorded with the county clerk before she dies, or it does nothing. The cost is mainly the recording fee. Because it’s not a gift during her life, it also avoids gift tax and keeps his tax basis stepped up to the home’s value at her death.
Can Anyone Take the Property for Bills?
Possibly. A transfer on death deed doesn’t put property beyond her debts.
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Creditors: If her probate estate can’t cover her valid debts, creditors can go after property passed by the deed, usually within 18 months of her death.
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Medicaid: If she is 55 or older and receives long-term care through Medicaid, Oregon can recover from the property after her death even though it passes by deed. The state’s recovery law reaches anyone who receives property she owned at death, so the deed does not shield it.
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Oregon estate tax: Oregon taxes estates over $1 million. Most estates are below that.
Can Someone Fight the Deed?
Anyone can try. The capacity needed to sign the deed is the same as for a will. Challenges usually claim she lacked capacity or was pressured. To reduce the risk:
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Sign while she is clearly competent, and consider a doctor’s note.
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Use an attorney, especially if other relatives might object.
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Talk to the family openly.
Should She Give the Property Away Now Instead?
Not if long-term care is a possibility. A gift during her life triggers Medicaid’s five-year look-back and can cause a penalty period. A gift also loses the step-up in basis, so her son could owe more tax if he sells.
If protecting the property from Medicaid is a priority, an Oregon elder law attorney can review other tools. These include irrevocable trusts and certain exceptions for caregiver children. Those must be done well in advance, so the sooner the better.
