FAQ’s

Q:

I am age 87, retired-disabled; my wife is 78 and working part time but looks forward to retiring soon. We own a home with substantial mortgage, have a modest IRA, and about $70,000 in savings. We are being hit by excessive, crushing health insurance costs and our resources and SS income now are not quite enough to maintain a decent living standard. Our daughter has offered to help and we have discussed lending our savings to her business long term at 10% interest, which would be taxable income to us. Daughter is also willing and able to donate some gift money to parents if needed. Any alternate ideas; can I structure a plan where there will be no tax on the interest income? Or some kind of gift arrangement that would better?

A:

Generally, we would advise against intra-family loans where this is your total life savings you’re putting at risk. Why not leave the $70,000 in an FDIC insured bank account and let your daughter make gifts to you and your wife. She can give each of you $13,000 a year gift-tax free. If she is married, she can give you twice that amount. An alternative would be for your daughter to lend you the money and for you and your wife to give her a mortgage on your home to make sure that is repaid. We call this a “private” reverse mortgage. If your daughter does not have sufficient funds, you can also get a commercial reverse mortgage, but it would be more expensive and would have limits on how much you could borrow. However you choose to go ahead, you should document it in writing so that you make sure that everyone has the same understanding of what the deal is.

tags: Estate planning

Q:

If a person has an immediate annuity with 10 year certain. If after 5 years, the annuitant dies and has been in a nursing home covered by Medicaid, will the second beneficiary be able to receive the next 5 years of annuity payments or do they become the property of the state?

A:

That depends on how the state is applying federal law. Under the federal Medicaid law, the state is supposed to be reimbursed out of the future annuity payments for whatever it had paid out for the now deceased nursing home resident’s care. Only after such repayment has been made, may future annuity payments, if any, go back to the family. However, not all states are applying this provision, so you will need to consult with a local elder law attorney to be certain.

tags: Medicaid
Q:

If my daughter pays me for 1% of the value of my property and I make a deed as joint tenant with her, me as 99% owner and her as 1% owner, would that be considered a transfer with Medicaid? Would the property be protected that way?

A:

No, that would not be considered a transfer for Medicaid purposes if your daughter pays fair market value. A bigger question, however, is whether you can make a gift of a 1% joint interest. Traditionally, joint owners must share in the entirety of the property, meaning your daughter would have to pay for half the value of the property. You can always transfer a 1% to your daughter as a tenant in common, but that would still subject 99% of the value of the house to probate and to a Medicaid claim for reimbursement upon your death. Whether you can avoid this through a joint ownership as you suggest depends on your state’s laws.

tags: Medicaid
Q:

An elder law attorney told me that a $9,000 gift from my father made in 2008 would have to be paid back. His assets will run out soon and so I want to apply for Medicaid. As I understand the law then, would the gift of $9,000 that does fall within the look-back period disqualify his receiving Medicaid for roughly two months?

A:

Yes. All gifts made during the five years prior to an application for Medicaid must be reported. The will cause a period of ineligibility based on the state’s calculation of the average cost of nursing home care. If your state has determined that the average cost is $4,500 a month, then a transfer of $9,000 would cause two months of ineligibility, which does not begin until your father’s other assets have been spent down. You can reverse the penalty by returning the money, or pay for the nursing home privately for those two months.

tags: Medicaid
Q:

My mother gave $30,000 away in 2008. She is now in a nursing home and will apply for Medicaid in about 12 months. Can we “give back” the money? If so, how is it done so as not to appear as a gift? She does not have the funds to cover a disqualification period.

A:

Yes, you can return the money to your mother. This is known as a “cure” and, in effect, erases the original transfer for Medicaid purposes. And there’s no problem with you making a gift to your mother. If each person is giving her $13,000 or less, it doesn’t need to be reported. If anyone is giving more than $13,000, technically, it’s supposed to be reported to the IRS, but with the newly passed tax bill, you’d have to give away $5 million before there’d be any tax.

tags: Medicaid
Q:

I have a question regarding moving my husband’s 87-yr old grandmother to MD from FL since the passing of my father-in-law. We have already purchased a 55+ community condo for her, and will be moving her up in 3 weeks. She does not own a home, and it is my understanding that she only receives a small pension and social security. So, thankfully, there are no assets to fight over that we know of. She has one living son in NY with whom we have no contact. Other than ensuring she has a new medical power of attorney drawn up after the move, should we be addressing anything else?

A:

It sounds like you’re in pretty good shape. I would ask your husband’s grandmother to execute a financial durable power of attorney as well as the medical directive. Also, as part of the move, she should set up a new bank account in Maryland to receive direct deposit of her Social Security and pension and include your husband as joint owner. This will make it easier to manage her finances.

Q:

In the case of an elder diagnosed with Alzheimers, is it acceptable to transfer their savings into a separate account with the names of their children to safeguard the funds? The concern is the possibility of the elder with Alzheimers having access to withdraw and/or gift the funds without realizing the consequences. Can the funds be maintained in this separate account and only withdrawn and transfered to the elder’s normal account for paying their bills, personal needs, care, etc.? If the time should come for nursing home care and Medicaid application, and trackable documented transactions are maintained showing the funds were used for the elders needs, would the full original transfered amount be considered available funds when determining Medicaid eligability, or would it be the balance remaining in the account?

A:

What you describe should work as long as you are able to document every cent. Otherwise the senior can be deemed ineligible for Medicaid benefits until the nursing home costs equal the amount transferred. The way this works is that Medicaid creates a period of ineligibility for benefits for a period of time based on the amount transferred. If you can show that the funds transferred were used for the elder, they will be deemed as having been returned and as if they had never been gifted in the first place. But the burden of proof is on you.

tags: Medicaid
Q:

My mother just turned 60 and in trying to be prepared for her future, I stumbled upon long term care insurance. Can I buy this insurance for my mother since she cannot pay for it herself? Should I buy this product in the state where she is living or in my state? She has no income, no insurance, no savings and no assets. Oh yeah, and she doesn’t drive and she has fibromyalgia and she was just turned down for disability.

A:

It would be great if you could purchase long-term care insurance for your mother, but from what you say, she may not be a good prospect. Due to the fibromyalgia she may not be able to get coverage. And due to her financial situation, she is probably eligible for Medicaid to pay for nursing home care. That said, the advantage of long-term care insurance is that it covers in home and assisted living care, which are not well covered by Medicaid, and it would give her more options if she needed nursing home care. If you do go ahead, you should purchase the insurance in your mother’s state, unless you are getting it through your employer.

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Q:

Can a nursing home refuse to allow my family to transfer my father to another facility if I have Power of Attorney? We were told because my sister placed him there I could not have him transferred until she approved it.

A:

Yes and no. Generally a power of attorney provides you with the power to control your father’s finances and enter into contracts for him, but does not give you the power to decide where he lives, unless it specifically grants such power. Your sister also should not have this power unless your father granted it to her through a power of attorney or health care directive. Absent a guardianship appointment, your father has the right to make his own decisions in this regard. If he is not competent to do so, you may need to seek guardianship.

Q:

My mother’s (second) husband has been back and forth between hospitals and a nursing home for the past month. All of their assets- home and stocks/bonds/annuities- are in his name only. We contacted a recommended elder care attorney for the Medicaid application/asset transfer & preservation. I understand it’s a rather complicated and time consuming process. Can you please give me a ballpark figure for these services on Long Island, and also how is the attorney’s fee collected i.e. total upfront, payment in thirds, one half, etc. Thank you !

A:

Attorneys charge differently, so you will have to ask. But most elder law attorneys have moved away from charging by the hour towards a flat-fee model that reflects both the amount of time and the expertise needed to complete the needed work. Medicaid planning and Medicaid applications consist of a mix of elements. The planning piece takes the expertise of an experienced elder law attorney, but may not take considerable time. The application can be time consuming, though most of the work can be completed by an experienced paralegal. My guess is that you will be looking at fees in the $10,000 range.

tags: Medicaid
Q:

My father and mother executed a co-durable power of attorney naming my brother and me as joint attorneys in fact. My father is now deceased. My mother is owner of an investment portfolio with monthly dividends being automatically reinvested. My brother and I wish to have the dividends placed into mother’s checking account so that I may utilize the funds for monthly fees at a ‘memory-care center’. A large investment firm/bank doing business in our state of Washington will not honor the ‘power of attorney’ because it is a ‘joint’ power of attorney. Apparently their policy would honor the power of attorney if the document specified my brother or I were able to act alone. My mother can no longer sign her name in order to modify the existing power of attorney. Question: What legal grounds does a bank have to deny us using a power of attorney?

A:

While banks and other financial institutions are known to refuse to accept powers of attorney for no good reason, in your case it sounds like the bank may have a point — but only so far. If the power of attorney does not specify that you and your brother can each act on your own, then the bank should still honor any check signed by both of you. If it won’t, you may want to contact your state agency that regulates banks to see if it will apply some pressure on your behalf.

Q:

My mother is in a non-profit nursing home and the nursing home wants my stepfathers pension of which I use to pay my travel costs for visiting my mother. My stepfather died before my mother was admitted into the nursing home. The pension is less than $100. Can I refuse to give it to them?

A:

No. It sounds like your mother’s care is covered by Medicaid. Typically, nursing home residents who receive Medicaid must pay all but a small amount of their income to the nursing home and Medicaid picks up the balance of the cost. If you don’t pay over all of the income, the nursing home could sue you for the money or it could seek to evict your mother for nonpayment. More likely, given the amount involved, the nursing home will be stuck with the loss, which doesn’t seem fair.

tags: Medicaid
Q:

My mother is 93, healthy, able, takes care of herself. does her own laundry, cleans her condo, fixes her own food and does her own grocery shopping. My sister who lives an hour away, behind her back moved moved all of her furniture and belongings out of her condo and over to an assisted living facility where she does not want to be. They took her cell phone so she could not call me, and are now lying to everyone about her “memory” problems. She is heartsickend and devastated by the betrayal. She feels trapped and in prison. Can I move her back home, and if necessary pay for in-home care (or someone to check on her daily)? I went to my mother’s doctor appointment with her and her doctor recommended assisted living because of her age. My sister has threatened to call protective services if I move her. Can I move her back into the area that she wants to live in, either in her own home with “home care”, or an “assisted living” without my sister turning me in to protective services? Does my mother have any rights?

A:

The bottom is line is that if your mother is legally competent she can choose where she wants to live. She is presumed to be legally competent until a court determines that she is not. If she moves home and protective services becomes involved, they will determine whether she is safe. If they feel she is not safe, they may institute guardianship proceedings to determine her competency and to have someone appointed to make decisions for your mother. I would recommend that you and your mother follow one of two courses: First, your mother can consult with an elder law attorney who can advise her of her rights and make sure they are protected. Alternatively, the whole family can meet with a mediator to get all issues on the table and to seek a resolution that satisfies everyone. Good luck.

Q:

My aunt lives with my husband and me, having moved up here in Indiana from Texas where she and my uncle had no family down there to take care of them. My uncle is in a nursing home. My question is that I came across their wills that are about 4 years old and I need to have them changed because their living conditions have changed and I am now the full time care giver, POA and what ever. Do I have to take them both to a lawyer to change this or can I just take my aunt who generally signs for my uncle?

A:

Yes, your aunt and uncle must meet with the attorney alone without you present. It’s best as well, that you do not see the new wills. This will protect them from being challenged as having been created under your undue influence. If your uncle is for him. Wills may be executed only by the legally competent individual whose will it is.

Q:

I am getting to that age where I need to start thinking about my assets and estate planning. Just wondering what the steps are and is it really necessary to see a lawyer? Thanks for the help or suggestions!

A:

Yes, I would strongly advise that you consult with a local elder law attorney. There are so many issues involved in planning, including providing for your heirs, managing your property in the event of incapicity, asset protection plan for your children (if any), and planning for long-term care. While reading books (including Looking Ahead which you can order from the ElderLawAnswers home page) will give you a good start, every person’s situation and goals are unique. You need the experience of an attorney who has worked with hundreds of clients at a similar point in life to make sure that you plan is the best for you and your family.

Q:

My brother recently died in the state of Texas and at the time of death he was on state aid and had no money. My mother who lives in the state of Arizona has recently received a few bills. Is she obligated to pay his debts? There is no estate. What does she so with these bills?

A:

Your mother is not responsible for your brother’s debts out of her own funds. If she had received money from your brother’s estate, she would be responsible for using those funds to pay your brother’s obligations. She should simply let the creditors know the situation.

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Q:

Can a family member or agent under a power of attorney prohibit the community spouse from visiting the nursing home spouse when there has been no abuse or any substantiating reason for withholding visitation?

A:

Technically, the answer is “no”; it is up to the resident to determine who may come visit. As a practical matter, however, the resident may not be competent to make that decision and the facility may defer to to someone the resident has chosen, the agent under a durable power of attorney. If a dispute over visitation cannot be resolved by the various parties talking it over, the community spouse should consult with the ombudsperson, a volunteer who works to protect nursing home residents. Ultimately, visitation rights may have to be resolved through the appointment of a guardian who would have the legal power to make decisions on behalf of the nursing home resident.

Q:

My parents are getting older, 78 year old, and they want to make sure their home is not taken from them if they should end up in a nursing home. I have heard they should put the house in a trust but I have also heard that gifting the house to their children is the way to go. Can you please clear up this question for me?

A:

Both approaches have their benefits and drawbacks, but we generally prefer the use of a trust. The reason for this is that a trust protects the house and the parents in case the child or children run into financial difficulties whether due to the loss of a job, illness, a lawsuit, bankruptcy or a divorce. Also, the parents are protected from the children deciding it’s time for the parents to move out, for whatever reason, or if the child passes away first and the house goes to an in-law or grandchildren. Finally, there are tax benefits for the children if a trust is used as opposed to an outright gift. The advantages of a gift over a trust are its simplicity and the fact that it’s easier to reverse. Either an outright gift or a trust will cause the parents to be ineligible for Medicaid during the subsequent five years (a reason to act sooner rather than later), but a gift is easier to reverse if a parent does move to a nursing home and require Medicaid during that five-year penalty period. I’d recommend consulting with an elder law attorney to determine what makes the most sense in your parents’ situation.

tags: Medicaid
Q:

Son put $150,000 of renovations into home of his parents . Home is now valued at $875,000. A year ago, parents changed the deed to the house so its owned by the parents and the son jointly with rights of survivorship. Parents are uninsurable. How would Medicaid handle this? Wouldn’t it make sense to transfer outright to son now to start 5-year look back?

A:

Perhaps, but everyone may be better off using a trust. As you suggest, a transfer of the home to the son will cause five years of ineligibility for Medicaid benefits for both parents. Depending on their health and other resources, this may or may not be a risk they should take. A transfer outright to the son has several drawbacks, including the following: The house would then be subject to any claim should the son be sued or divorced or pass away. In addition, when the son sold the house he would have to pay tax on the capital gains which would be determined based on the difference between the parents’ purchase price, plus the value of improvements to property, and the son’s selling price. These risks can be prevented by transferring the house to a properly-drafted irrevocable trust. The trust would protect the house for the parents (and the son and his family as well) and bring the son a “step-up” in basis upon the parents’ death, reducing or eliminating any tax on capital gain. These issues are complicated and the right answer depends on everyone’s circumstances. These decisions must be made with the assistance of a qualified elder law attorney.

tags: Medicaid

 

Q:

My wife and I are in our 60’s and have had to deal with aging parents who made some poor financial decisions later in life. How can we protect our assets from being given away by us should our mental capacities diminish? If we put them all in our children’s names and they are sued, would we lose our assets?

A:

Good questions. First, don’t put your assets in your kids names. They would be at risk if they were sued, went bankrupt, got divorced, passed away, or simply made some bad decisions. Do execute durable powers of attorney which would appoint someone else to manage your financial and legal affairs when you are no longer able to do so. But even better, you and your wife can create a revocable living trust with one or more of your children as co-trustees. The funds would still be yours to manage and use as you choose now, but your co-trustee could receive monthly statements and could step in when and if necessary. An estate planning attorney can explain other advantages of these trusts.

Q:

My father-in-law is in a nursing home in our small community. Of course he gets social security and a pension. He has had his former employer to take out taxes (federal) since his retirement. The nursing home gets all his money(around $2,430), and Medicaid picks up the balance. Medicaid is now telling my husband (POA), that his dad will have to not have the money every month taken out for taxes, because they want it. We have asked them why, and they tell us Dad doesn’t have to pay taxes because he is in a nursing home. Well the federal government is telling us he does have to pay taxes. What can we do?

A:

I would be very surprised if your father-in-law still must taxes now that he is in a nursing home since his contribution of his income to the nursing home should be treated as a deductible health care cost. So there should be no reason to continue to have the taxes deducted from the pension. The Indiana Medicaid agency accordingly included all of the income in determining what must be paid to the nursing home. To check on this you could consult with a local accountant or elder law attorney.

tags: Medicaid
Q:

What are the acceptable ways of spending someones $$$ who is applying for Medicaid? Can it be on clothing, home furnishings or appliances? Can funeral arrangements be pre-paid? What other ways can be used without Medicaid seeing it as a cash value or asset that they can cash in on?

A:

You may pay for anything for the benefit of the nursing home resident, including clothing, furnishings, a prepaid funeral or irrevocable funeral contract, entertainment, extra therapy, or the professional services of a geriatric care manager or elder law attorney. The exact rules around such spending can differ from state to state, with some Medicaid agencies being more expansive than others in what they will permit. To know for certain is allowed, you need to meet with a local elder law attorney, who can let you know if there are other planning steps available in your situation.

tags: Medicaid
Q:

Mom went in nursing home 3 years ago and has been private pay. Son has lived with her since 1992. She became unable to care for herself about 2 years before entering nursing home, and son cared for her in the home. Deed is currently in her name. Assuming she eventually qualifies for Medicaid, will her home be subject to recovery? Can she deed the home to her son? She has Alzheimers.

A:

Yes, if the home remains in the mother’s name, after her death the state will have the right to recover whatever it has paid for her care under the Medicaid program. Fortunately, under the Medicaid rules, the son qualifies for an exception to the usual restrictions on transferring assets. The so-called “caretaker child” exception permits the transfer of the home to a child who has lived in the home for at least two years before the parent moved to a nursing home, and who during that time provided her with care that kept her out of the nursing home. The second issue in your case is whether the mother is competent to sign a deed transferring the home to her son. If she is not, the home may be transferred under a durable power of attorney, if one exists. Otherwise, it may be necessary to seek guardianship and court approval of the transfer. To implement the transfer and to make sure there are no local rules standing in the way, you will need to consult with an elder law attorney in your state.

tags: Medicaid
Q:

Sister has Mom living with her, charging Mom rent, etc. Problem is she thinks she has a free for all with all of Mom’s money. I take care of all the finances, taxes, billing, bank, etc. She charges Mom $600 a month plus, and wants to charge even if Mom is not staying there, because that is what any place else would do. My husband and I never charged Mom in the 17 years we helped, and took care of her. During the past months, I needed a break from helping Mom to take care of my own health. Unfortunately, sister is not fair with anything concerning Mom. I want to protect Mom’s money for her, especially because she is almost 90 years old and has health problems. She is not in any facility, but we ( my husband and I) are thinking of an apartment with the 3 of us, and hirining help for her and me. I need legal answers before I confront Mom with this mess.

A:

These family situations are always very difficult. Everyone has different expectations and needs, and these can get confused with sibling rivalries or resentments that date back to childhood. The best thing to do, if possible, is to have a full discussion of all of the issues around your mother’s care and expenses, starting with each of your hopes and expectations. Ultimately, any agreement should be put in writing, not because you would sue one another if the agreement were breached, but because it’s a way of making sure you’re both on the same page. This kind of discussion often needs to be facilitated by a mediator or attorney to make sure it doesn’t break down in bickering. You may need more than one meeting. And, since you live in different states, some or all of the conversations may have to take place by telephone.

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Q:

Although my siblings and I are not in favor, my parents have health issues that might require one or both to go into a nursing home down the road. My parents have been giving us money for birthdays and Christmas (as much a $1,000 per child) and we are concerned that if they have to go a nursing home in less than 5 years from now we might have to pay back this money. Are our concerns justified?

A:

Yes, those concerns are justified. Your parents should make no future gifts without first consulting with a local elder law attorney. That said, the past gifts may or may not be a problem and it may be possible to make some future transfers. That depends on your parents’ health and financial status and many other factors. A qualified elder law attorney would be able to advise your parents and their family how best to proceed.

tags: Medicaid
Q:

I am planning to use a company to help get me through the Medicaid application process for my mother. Any opinion on using an organization like that vs. a lawyer? They are very reasonable – much less than a lawyer would charge.

A:

As always, the answer is it depends. If your mother is spent down, no transfers were made over the past five years, and it’s simply a question of processing the application, you should be fine using a non-lawyer service. But if any planning needs to be done, if your father is still alive and living in the community, or if there’s anything unusual about your mother’s finances, you need to use an elder law attorney. Even if the attorney helps your mother qualify a month sooner, that will justify her fee. And she may be able to save you much more. The fee may come from funds that would otherwise be paid to the nursing home. In any case, we strongly recommend that you consult with an elder law attorney to determine whether planning is possible and advisable.

tags: Medicaid
Q:

Mom has Alzheimer’s and I am on her checking account. Mom is living with family but eventually will go to a nursing home. I am paying her bills from her checking account. My question regarding the checking account: what does Medicaid look for? Do they check every written check for past five years? What makes them stop and question something? Is it the amount?

A:

If you spend all the money for your mother and use checks rather than cash, you should have no problem. Every state, and to some extent every Medicaid office, is different. I would just keep all of your receipts and clear notes in your checkbook register just in case any questions are asked. But in general if you can track where the money went and that it was spent for your mother, you should be fine.

tags: Medicaid
Q:

My widowed father-in-law quickdeeded his house to my wife as co-owner in Tennessee. Is there a downside to this? I’ve heard it can add costs. However, the house is now worth much less than when he purchased it a few years ago.

A:

There probably is no downside. Legally, the property now belongs to your wife, though she does have a moral obligation to use it for her father’s benefit. The house is subject to any claim by your wife’s creditors should she get into financial trouble or be sued. In some cases, though it sounds like not in yours, the gift of the house can cause greater capital gains and a greater tax when it is sold. Here’s how that would work: If, for instance, your father-in-law purchased the house for $150,000 and it was now worth $350,000, it would have $200,000 of gain which under current federal law would be taxed at 15% (plus any Tennessee tax). If your father-in-law still owned it and sold it, he could exclude up to $250,000 of gain and avoid any tax. If your wife inherited it, the “basis” on which the capital gain is calculated would “step up” from the $150,000 purchase price to the $400,000 value on the date of your father-in-law’s death, also avoiding any gain and any tax. In your case, however, your wife may be better off receiving the house as a gift if its value goes up over time or if you have a capital loss on its sale which you can use to offset gain realized on other assets you may have.

Q:

What are my rights as a daughter to information regarding my mother’s medical and financial information. Approximately two years ago, my nephew took my mother and had the Power of Attorney changed to him without my knowledge. She was in the beginning stages of Alzheimers and I feel did not understand what she was doing. I never received a revocation. He now refuses to give me any information regarding my mother. The locks have been changed on her home. I have had the Office on Aging check into this and since that it has become even more difficult to get information. I only want to know what the condition is of my Mom and what is best for her. Do you have any suggestions?

A:

Whether your power of attorney is still effective depends on whether your mother revoked it. If she did not, though it sounds like she did, then both you and your nephew have valid powers of attorney and can act for your mother. If your mother revoked your power of attorney, then your nephew is in his legal rights to act for her, assuming that your mother knew what she was doing when she gave him a new power of attorney. Since you suspect that your mother was not competent and is not being well taken care of now, your first step in reporting the case to the Office of Aging was totally appropriate. If this was not effective, your only alternative may be to seek guardianship over your mother. This would bring the matter to a head in your local probate court and, most likely, result in the appointment of an independent, non-family member as guardian for your mother. These types of cases can be extremely acrimonious, time-consuming and expensive, but it may be the only alternative.

Q:

We live in NJ. My dad broke his hip from a car accident; went through therapy, came home to his house and fell down his steps and broke it again. His house had too many steps so he could no longer live there. We sold my dad’s house; used the money as a downpayment on our new ranch style house for myself, my wife and my dad. We went though an eldercare lawyer who created the deed giving my dad a life estate and my wife and myself ownership after my father’s death. My name is the only name on the mortgage. My Dad lived with us for 1 year and 4 months; his dementia has really increased and we had to put him in a nursing home. We are applying him for Medicaid. Any ideas on how Medicaid will treat the life estate?

A:

Based on what you say, your father’s purchase of a life estate in your new home should not be treated as a disqualifying transfer. He lived in the house for more than a year, which is a requirement under new laws. So the only issue should be whether he paid the appropriate amount for his life interest. The amount is determined based on your father’s age and the value of the house. Given that this was structured by an elder law attorney, it should fit the requirements. But to be sure, you can go back to the elder law attorney and make certain that the transaction did meet all of the requirements.

tags: Medicaid
Q:

My father-in-law gifted the family home to his daughter retaining lifetime living rights. He has not lived in the house for more than five years, nor does he contribute to the up keep or maintenance of the house or property. At the fathers request the daughter took out a mortgage on the house and gave him a little more than double the price he originally paid for the property. The father now wants the daughter to “sell” the house and is demanding $50,000. What are the daughter’s rights?

A:

I’d say first that the daughter needs a lawyer and that I do not know the law in the particular state. That said, typically the so-called “life tenant”, the father in this case, has the obligation to pay for the upkeep and taxes on the house. On the other hand, one would expect someone else living in the house, the daughter in this case, to pay rent. The daughter taking out the mortgage and paying her father a large sum may or may not have covered rent in addition to her payment for a so-called “remainder interest” in the house. Who owes whom in this situation is hard to say without looking at all of the numbers. In terms of a sale of the property, the father has a right to the value of his life tenancy, based his age and the value of the property. Without more information, I can’t say whether that is more or less than the $50,000 he is demanding, or whether this too has been covered by what the daughter has already paid her father. In short, the outcome of this matter will be determined by the facts. It does show, however, that any transaction concerning real estate should be carried out with all of these issues discussed in advance.

Q:

My mom died in Massachusetts without a will while she was on Medicaid. My sister’s name is on the deed to my mom’s house and filed probate. Now the state wants my mother’s house for reimbursement. Can they take the house if my sister’s name is on the deed?

A:

It depends on how your mother and sister owned the property. If they owned it as “tenants in common,” then you must probate your mother’s estate and her half of the property will be subject to claim by the state. If they owned it as joint tenants, the property will pass automatically to your sister free from claim by the state. Even in the first instance, if your sister has low income and lives in the house she may qualify for a waiver of the state’s claim. These rules may be different in other states.

tags: Medicaid

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