You sell the house to the kids at fair market value with life use.
When you file, you take the tax exclusion available since it was your primary residence.....and you wind up paying no taxes on the capital gain.
This is pretty common here.
Most of the time the kids don't have the $ to pay FMV.
You are talking about a fair market sale that could bypass capital gains tax.
I was talking about medicaid and estate tax.