You need proper legal advice from an elder law firm.
If your parents ever need long term nursing home care, and don't have sufficient funds to pay, or private insurance, Medicaid won't cover their expenses until they are "poor", meaning they can each keep $3000 and a car. They can be forced to sell any other property, including a house if they are not living in it. If they have given away their funds or property in order to qualify as "poor" in the past 5 years from needing Medicaid, Medicaid can penalize them and deny coverage, unless the people to whom they gave their property or money give it back and use it to pay for their care.
There are ways of protecting a home and other assets from Medicaid, and preserving the basis adjustment, but you need legal assistance to set up the correct legal forms for your situation.
