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In general, your children will pay less tax if they inherit the property than if they are given the property.
However, also "in general", if you own property and require long term medical care, you can be required to sell your property to pay for your own care until you have less than $2000 of "countable assets" left, at which point Medicaid will take over. This is why some parents give away their property to their children, which "saves" the property but can subject the children to high taxes when they sell.
And also, "in general", if you give away your property in order to get under the Medicaid asset limit, Medicaid can claw back those gifts made within 5 years, so your kids end up with nothing anyway. (If you unfortunately need long term medical care.)
There are ways to protect your assets while at the same time protecting your children from high taxes, but the options are complicated, and there is no one-size fits all solution. See if you can find a reputable Elder Law/Financial Planning firm in your area. The consulting fees will be worth the money and trouble they can save you.
