Protect Your Home From Medicaid Liens – Part 2 (April 2010)

PROTECT YOUR HOME FROM MEDICAID LIENS (PART 2)

Last month we discussed the dangers of having the government put a Medicaid lien on your home and property if you end up in a nursing home.  Remember, a “revocable living trust” cannot protect your home from nursing home costs.

Some senior citizens who are worried about Medicaid liens just give the house to the children.  I do not think this is wise.  There are many cases in which the parents gave the home to the children, then the children kicked the parents out of the home!  Even if your own child would never kick you out of your home, maybe your son-in-law or daughter-in-law would.

There was a case in Honolulu in which an elderly father and mother had only one son.  The son was married but had no children.  The parents went to a lawyer  and gave their home to their son.  They kept living in the house.  The son and his wife got into a terrible car accident.  The son died first.  Then the son’s wife died.  When the son died, the house went to his wife.  When the wife died, the property went to her parents!  Her parents lived in Germany.  The couple in Germany sold the house!  The elderly couple in Hawaii were kicked out of their own home in their old age!  Because of cases like this, I do not recommend that you just give your property to your children.

In my opinion, the best way to protect your home from Medicaid liens is to give the property to your children, but to keep a “life estate.”  Keeping a “life estate” means that you legally own the property as long as you are living.  Nobody can kick you out.  Yet, you have legally given away a “future interest” in the property to your children.  This means that your children already own the property now, but cannot use it while you are living.  If you were to pass away, the children would automatically be the full owners of the property.

If you give your home to your children (or other loved ones), but keep a life estate, these are some of the consequences:  1) you cannot take the property back unless your child agrees; 2) you cannot mortgage or sell the property unless your child agrees; 3) if you do sell the property while you are living, you will get only part of the money from the sale, and your child will get part of the money; 4) when you die, the value of the property will be counted with your other assets to see if you have more than $1 million (if you do, there may be an estate tax.)  5) If you apply for Medicaid within 5 years, there will be a penalty period ( a period of time during which Medicaid will not pay nursing home costs).

There are several advantages to giving away your property while you are living, but keeping a life estate:  1) you will still be entitled to the homeowners exemption from property tax; 2) you can live in your home for the rest of your life; 3) there will be no probate of your home when you die; 4) a Medicaid lien cannot take the property away from your children; 5) when you die, the property gets a “stepped up basis” so that if your children sell the property, they will pay little or no capital gains taxes (because of the 2001 Tax Act, there will may be no stepped up basis if you die in the year 2010.)

If you already have your property in a revocable living trust, you can still use the life estate technique.  You just take the property out of your revocable living trust, put it back in your own name, then give it to your children, keeping a life estate.  If more senior citizens did this, more children would be protected from Medicaid liens on the family home.

OKURA & ASSOCIATES, 2010




32 Responses to “Protect Your Home From Medicaid Liens – Part 2 (April 2010)”


  1. 1 Kristy

    if i do give my property to my children and have a life estate can i put it in all three of my childrens names? and also can anyone else put a lien on my property or take it away? Also my mom signed papers for medicaid can they lein it even if she doesnt go to a nursing home? Like to pay for what she uses of medicaid? thank you any help you give will be deeply appreciated. Kristy

  2. 2 sanford

    @Kristy – Yes, you can put the property in all three of your children’s names. However, a better technique is to put the property into an irrevocable trust for all three of your children, with one or two or three of them acting as trustees. You would still keep a life estate. The risk of putting the property in the 3 children’s names directly is that if one of them got divorced, or sued, or had to file for bankruptcy, someone outside of the family could end up owning that child’s share. In Hawaii, if you keep a full life estate, they would not be able to take the property away from you, but they could cause all 3 of your children’s remainder interest (or future interest) shares, to be put up for sale in an auction sale, even though they obtained a lien only against one child’s share. This is called a “partition action.” In Hawaii, Medicaid does not place a lien on property for regular Medicaid, but does place a lien on property for nursing home Medicaid.

  3. 3 target

    i’m in new york state, so i’m not sure if you can answer my questions. a ‘life estate’ was signed 3 year ago for mothers house. mother entered hospice care 3 months ago and has had costs covered by Medicaid. our family would like to sell the home to a nephew.

    we are questioning if:
    1. we are able to even sell the home to anyone or does the state/county have a say in this process?
    2. will there be any concequences if we do sell? (ie. will medicaid costs be appropriated accordingly?)

  4. 4 donna mount

    Hi my Mom has been at Hale Anunue Hilo for 2 wks now.. they say she needs round the clock care.. My Mom owns her home but has willed it to my brother upon her death..The nursing home has notified the family that after 100 days they can apply her assets to pay for care.. she doesn’t have any liquid cash and only owns the home and SS.
    My brother is disabled and lives in the home and has been her caregiver for years.. i understand medicade cannot take her home because of my disabled brother..
    please tell us what we should do to protect the house.. our understanding is that they can take the home but my brother is able to live in the home but not his two children over the age of 21.. Help

  5. 5 April Steg

    My father in law recently passed away & shortly after my mother in law ended up in a nursing home. We would like to live in their home but it needs a lot of work. We do not want to put a bunch of money into the home only to have medicaid force us to sell it when it has been willed to us. Can you tell us how this works?

  6. 6 Cheryl

    What if the house is placed in the childs name and then they sell it while the parent is in a Nursing home. There would be no home to place a lien on. Please advise.

  7. 7 Sanford Okura

    @donna – The home is an exempt asset for Medicaid qualification purposes, but it is not exempt from recovery. In other words, if your mother has less than $2,000 in assets, she can qualify for Medicaid, because they will not count the value of the home as an asset. However, after she starts receiving Mediciad benefits, the State of Hawaii can place a Medicaid lien on the home. The usual schedule is that six months after mother starts receiving Medicaid benefits for nursing home care, they will give her a 90 day notice of their intention to place a lien on the property. Then, 90 days later, they place the lien. If your brother meets the requirements of being considered as having a disability, it should be possible to have mother transfer the property to brother, without creating a Medicaid penalty. There is a special rule that makes the transfer of a residence to a child with a disability an exempt transfer for Medicaid penalty purposes. There are different ways of making such a transfer and it is important that you understand the pros and cons of different ways of doing this. Feel free to contact Okura & Associates if you still need to take steps to protect the home.

  8. 8 Sanford Okura

    @target – I can tell you what the consequences would be in Hawaii, and I suspect that the same would hold true in New York. You could sell the home without the government’s consent, but that would probably be a bad idea. Mother is able to qualify for Medicaid now, because her life estate in her home is considered an exempt asset. If the home is sold, her share of the money she receives from sale of her life estate will surely be more than $2,000. That cash belonging to her will not be an exempt asset, and she would lose her Medicaid benefits. I encourage you to seek advice from an Elder Law attorney in your state who has substantial experience in Medicaid planning. Good luck to you.

  9. 9 John

    I have been trying desperately to find an answer to my situation. I hope you can help (I am in Indiana). In 1992 I purchased a lot (about $30,000.00) and my parents paid to construct a house on the lot. In 1999, my wife and I divorced. In an effort to save the home from being lost, my parent’s had both of us (me and my ex) sign a quitclaim deed. I was told that the house would be placed in a trust for a period of 10 years, and then it would revert back into my name. In 2009, at the 10 year mark I started asking my mom about getting the house back into my name. She seemed confused as to how to do this without one of us being charged a large sum of money (taxes). We talked about my parents selling me the home back for $1, but my mother seemed to think when I would go to sell the home in the future I might have to pay a large sum of income tax based on the difference between $1 and what the house actually sold for. She didn’t seem to think she could give it to me as a gift because she thought I would end up owing a “gift tax” on the home. The last thing we talked about was putting my name on the home along with theirs and then transferring my parent’s name off of the deed. My mom agreed that something needed to be done to secure the home back into my name. Evidently the house was never placed in a trust, but rather was just placed into my parent’s names.

    Unfortunately, before she was able do anything, or figure out what to do, she had a debilitating stroke that has found her in a nursing home. My second wife and I have poured a sizable amount of money into the home over the last 10 years (about $80,000.00). At the same time my parents built my home, they also built one for my sister of equal value. Her home has always had her name on it as she is single. My parents didn’t charge me rent…prior to the quitclaim deed they had requested a sum of money be paid which wasn’t paid and fortunately this was the saving grace in not loosing the home in the divorce. However, after the divorce my mom told me to not pay on the house. Any money I did pay I was told would go into a fund for when I might need help on repairs or financial needs. After marrying my second wife in 2007 I was told that not needing to pay anything on the home was our wedding gift. My mom wrote a paper (more than 5 years ago) and it is in the hands of her attorney stating that the house is mine, as is my sister’s house hers (though my parent’s names remain on my home). But now that my mom is in the nursing home I find out that I am at risk of losing my home of the last 19 years.

    My father is very confused about things. In one sentence my dad wants all the money he can get from where ever he can get it in order to pay my mom’s bills…in the next he wants to secure the money away from Medicaid. All conversations regarding the house and such were between me and my mom. It was money from her parent’s that built the houses. My second sister whose mortgage was paid by my parents has been in contact with some “senior services” place (consultants) and has all these ideas of what should be done with property and funds. My parents have somewhere in the neighborhood of $300,000 to $400,000 in CDs, rent coming in from a 100+ acre farm, my parent’s own home, and mine (in their name). My sister wants to put everything in trusts and try to get them approved for VA and Medicaid. Several other things that are at risk is a new van my parent’s purchased for my sister (the one with the house built same time as mine) and my son’s college education which they donated $20,000 towards.

    I need my parents to somehow transfer my home back into my name…but how? I can’t lose it. My sister isn’t going to lose her home. My wife and I honestly feel like my parents should just spend the money in the CDs for their care…transfer any properties out of their names to protect them from being lost, and once they would actually qualify for Medicaid, then apply for it. Doing so right now in my mind is cheating the system. Had they planned ahead I suppose they could have protected assets here and there, but it is my understanding it is too late now. I have heard that putting things in trusts at this point does not protect them (and or causes a delay in receiving Medicaid benefits). But whoever my sister is talking to has her believing that it does. I understand that my dad may be able to adjust things in order to get VA help; after all he is a WWII vet who suffers from hearing loss and Parkinson’s. But I have a real difficult time with applying for Medicaid and hiding or securing money that should be going for their care.

    If the timing wasn’t bad enough the way it is, I had an accident in 2008 and was on LTD till just last month…not good enough to go back to what I did, not bad enough to remain on LTD or SS. So now I am unemployed without any benefits. My wife also just lost her job. She has been looking for something for quite some time and has finally had an offer, but it entails us moving 2,000 miles. There is nothing here work wise for us and in order to survive we must move. We would like to rent the house out for a while; with rent here covering our rent there (it is the only way anything will work). In a couple of years if we find that we are staying in our new location we would sell the home…if things don’t work out, we would likely return to our home. My sister is telling us that if we rent, then the rent has to go to my parents, and that this is the only way to save our home from Medicaid (if it is an income producing property for my parents…though I am not sure what happens to it after that). One of us working is better than none, but without the income from the home here we won’t make it with rent there! My wife and I feel that my second sister has more interest in the money in the CDs than anything else (she is currently filing for bankruptcy and her home is secure). I have requested she let me be a part of the financial meetings, but so far she has not allowed me. My father doesn’t trust the people my sister is getting information from (and I am not sure I do either), and my sister doesn’t trust my dad’s attorney (who should have been helping my parents with estate planning long ago and didn’t). My second sister has everything to gain, while my other sister and I have things to lose.

    Is there any way to save our home, get it back into my name so we won’t lose our equity, and if my parents some how manage to get Medicaid which I don’t think they qualify, save my home from being liquidated.?

    Please help…I really need to know what direction to go with things!

    Thanks!

  10. 10 Sanford Okura

    @April – I can tell you how it works in Hawaii. It may work as well in a number of other states. When a person ends up in a nursing home on Medicaid, but has a spouse living in the home, the government cannot put a lien on the home. When there is no spouse living in the home (as in the case of your mother in law), the government can place a Medicaid lien on the home. The lien is like a mortgage: it will guarantee the government the right to collect out of the value of the home, after your mother in law dies, the money that Medicaid paid towards her nursing home costs. Generally in Hawaii, 6 months after the person gets on Medicaid, the government gives notice of their intent to place a lien. The actual lien is placed 90 days later. Once the lien is placed, there is a good chance that the home will be lost after the Medicaid recipient dies. You are wise to not pour money into the house for repairs. However, there are a couple of possibilities that might work, but that have to be done before the Medicaid lien is placed. One possibility is to have your mother sign a mortgage on the home in your favor, with her as the borrower and you and your husband as the lender, to secure repayment of the loan you are making to her to do the repairs to the home. If the mortgage in your favor is recorded before the Medicaid lien is recorded, when the property is sold someday, you should receive your money back, with a reasonable rate of interest, before the rest of the proceeds from the sale of the property goes towards paying the amounts owed under the Medicaid lien. If you are able to live in the house rent free for the rest of your mother in law’s life, which seems to be allowed in Hawaii, that could result in many thousands of dollars of savings for you and your husband. The other possibility is to sell the house, in which case your mother will lose her Medicaid benefits, but then she can gift the money to you and your husband, with some of the money to be used to pay for her care and some of the money to be kept by you and your husband as a gift from her. This way, at least some of the value of the home will get to you and your husband. If you want to try either technique described above, it is very important that you consult with a competent attorney who is experienced in Medicaid planning. If you try to do it yourself, or if you get advice from an attorney who is not thoroughly experienced in Medicaid planning, one little mistake could result in financial disaster. But if you do it right, there may be significant financial advantage for you and your husband. Good luck to you.

  11. 11 Sanford Okura

    @Cheryl – In Hawaii (and this rule is probably similar in many states), if the house is transferred to a disabled child or to an adult child who has been living in the home for at least two years before the parent is admitted to a nursing home, and if such adult child was providing care to enable the parent to remain in the home, then there is no Medicaid penalty for that transfer, and there would be no problem. (Although if the disabled child is on SSI or Medicaid, there could be a problem for the disabled child.) No lien could be placed on the home, because the parent no longer lives in the home. However, if the home is transferred to a child who is not disabled and has not lived in the home for at least two years, then there would be a problem if the parent goes into a nursing home and applies for Medicaid within five years after that transfer. Five years is the look-back period. When a person applies for Medicaid to pay for nursing home costs, the government looks backwards to see if any transfers were made during the last 5 years. If there was any transfer made for less than fair market value of the asset transferred, then a Medicaid penalty is assessed. The penalty is the number of months that the government will not provide Medicaid help. In Hawaii, the penalty is calculated by dividing the value of the gift by $8,850 per month. For example, if a parent transfers property worth $88,500 to a child who is not exempt from the transfer penalty, the length of the penalty is calculated by dividing $88,500 by $8,850 per month. In this example, the penalty would be 10 months. The $8,850 figure is used, because the government has determined the average cost of nursing home care in Hawaii to be $8,850 per month. Once the property is transferred, the government cannot place a lien on the property. However, if the parent ends up in a nursing home and applies for Medicaid before 5 years go by (to be safe, you should not apply until the next calendar month after 5 years have gone by), the government will not provide Medicaid help, and there will be a big problem even though there is no lien on the home. Often, the child has to sell the home and pay for the parent’s care until the penalty is over. Also, there are some ways of transferring a home that are better than others, for example to reduce capital gains taxes upon eventual sale of the home. Before you do any transfer of property, it would be important to consult with an attorney in your own state who is experienced in Medicaid planning.

  12. 12 Sanford Okura

    @John – You write very well. You have a number of different issues,and you described clearly in detail relevant facts surrounding those issues. I will address each of the issues you raised. First, as to the title to your home, it certainly sounds to me like you are entitled to most or all of the value of the home. When your parents first told you that the house would be placed in a trust and would be returned to you in 10 years, even though no written trust document was drawn up, it may be possible to argue that a “constructive trust” had been formed, and that your parents are obligated to turn the property over to you now that more than 10 years have gone by. If for some reason that argument doesn’t work, the $80,000 you poured into the property should entitle you to at least a portion of the equity in the property. Finally, since you were told that the amounts you owed your parents were given to you as a gift, and an attorney holds a piece of paper so stating, it seems to me that you are entitled to all of the beneficial interest in the property, and that your parents only hold the legal title. If you or your parents were my client, based on the information you have given me, I would probably simply have your parents sign a deed now, transferring the legal title to you, but claiming that there was no value being transferred to you at this time, because either this transfer is the fulfilling of the constructive trust set up many years ago, or is the paperwork following up on the gift which was made to you more than 5 years ago. (Do check your dates – you said it was a wedding gift and that you were married in 2007, which is less than 5 years ago, but then you also said this forgiveness of debt occurred more than 5 years ago.) Second, you mention that your sister is getting advice from “senior services” people. I have seen a number of cases in which well meaning social workers or other “senior services” people have given the wrong advice to the elderly or their families. When these families have come to our law firm for advice, we have had to straighten them out on the wrong advice they had received earlier. The Mediciad laws are very complicated, and many times even the Medicaid workers themselves are undertrained and overworked and do not understand certain Medicaid laws. You must get the advice of a competent, honest, intelligent attorney who has substantial experience in Medicaid Eligibility Planning. Third, you mentioned substantial other assets that your parents own. These assets do not necessarily have to be lost. By proper planning, it is often possible to save some of the assets, and sometimes all of the assets. Your sister’s idea of placing these assets into a trust may be a good idea or a very bad idea, depending on what kind of trust she is talking about, and what the additional aspects to the plan are. Again, this is a very complicated area, and you must get the help of a knowledgeable Medicaid Planning attorney. Fourth, you mentioned your concern about not wanting to cheat the system. I absolutely agree with you. You never want to attempt to cheat the system, because the crime of Medicaid fraud can land a cheater in prison. However, there are enough legal ways to qualify for Medicaid while saving some of the assets for the family that it is not necessary to throw up your hands and give up all of the assets. Fifth, you mentioned renting the home. If the home stayed in your parents name, they probably wouldn’t qualify for Medicaid anyway, and if they did, any rent from the home would have to go to the nursing home. If you follow my suggestion above and just have the property transferred to you, any rent would go to you. Sixth, you mentioned your father being a disabled veteran. The rule at our local veteran’s care home, and probably everywhere, is that a veteran must have been disabled 70% or more while on active duty to qualify for free nursing home care. Seventh, an important question is: who has the power to act on behalf of your mother if she is incapacitated? Somebody in your family – your father or one or more of the children – needs to hire an attorney with expertise in Medicaid planning soon to help you figure out the best course of action. Please understand that all that I have said above is based on my knowledge of Hawaii law, and it is important that you get advice from a competent attorney in your state. If you need help findng such an attorney, email me or phone me, and I will see if I can help you find the right attorney. Good luck to you.

  13. 13 John

    It seems that most attorneys I have written to (local) simply write back and say “we would be happy to represent your parents in applying for Medicaid” and totally disregard the fact that I am asking a question about my home (one even said helping me with my home would be a conflict of interest despite the fact I was the one who contacted him). Thank you SOOOO much for actually addressing my concerns and with such detail. I greatly appreciate your advice and assistance. I have been trying to tell my sister that my home should be protected by the events of the past years (i.e.: the “constructive trust” and the paper in the hands of the attorney) but she has been convinced…first that placing it in a trust now would protect it…or now that we are being faced with a move, that if it is being rented and providing income, it will protect it (however my wife and I would see no benefit to that as we would not see that rent…and we will be counting on some sort of income from the home in order to offset our living expenses at our new location). She told me that if it was being rented and the income was going to my parents, that at some point (in a couple years) perhaps my parent’s could “flip” the home back to me…but that doesn’t make any sense to me as I think that would be seen by Medicaid as truly transferring property at a loss…why would they allow you to transfer an income producing property out of their hands without some sort of payoff amount? Doesn’t make sense to me. But these are the things she is being told to do by these consultants who I am sure don’t know the details of my home.

    I will contact you via e-mail in regard to finding someone local who can hopefully help me if needed. Again, thank you so much for your advice and actually answering the questions I have!

  14. 14 Sanford Okura

    @John – You are welcome! I will do some research to find a qualified attorney in Indiana to whom I can refer you.

  15. 15 SuLee

    Dear Mr. Okura,

    I am getting ready to sign paperwork to close the sale of my Mom’s home in WA state tomorrow as her financial POA because she is currently living in CA and completely paralyzed.

    She moved there at the end of last October and was placed in a nursing home at the end of March, 2011 because the care got to be too much for my two Aunts. She currently has Medicare and Medi-Cal.

    We put her home up for sale because she needed the money to hire a full time caregiver and had no cash to do so. Now i think we might be regretting our decision. She will net about 120K after closing.

    Medicare will pay the first 100 days of her nursing care and then Medi-Cal kicks in. In the mean time, what do we do to protect this money so that it is not taken by the state and can continued to be used toward a caregiver while she is in a nursing home or adult/boarding care home while she is still living?

    She had so little, we did not realize more would need to be done to protect her very small estate.

    Thanks in advance and blessings for all of your wonderful answers above.

  16. 16 Donna D

    Hi, I live in New York State, I am in need of some HELP!!My Mother signed her home over to me and she kept “life use” last April 2010 , she is 86 years old. Well she is physically in excellent health but within the last 6 months been diagnosed with Alzheimer disease. I am an only child, age 55 and work full time, but would do all her shopping, cleaning, banking etc.. She was doing okay at home until 2 weeks ago when she began wandering at night. I would get calls from her neighbors and the police in the middle of the night. Her doctor said she had “sun downers” and needed to be in a nursing home. She was taken into a nursing home immediately…They say that I must sell the house immediately and turn the money over to the nursing home in order for her to get medicaid. Is this true??
    They also said that when her social security check and retirement come I must turn over them to the nursing home. My mother gets $600 a month retirement and 900 a month social security…I don’t mind giving them all her money for her care but do I have to sell the home also??? Please help me.

  17. 17 Sanford Okura

    @SuLee – Selling the house was probably not a mistake, because if you had not sold it and your mother got on Medicaid, the government would have placed a Medicaid lien on the home, and it would likely have been lost. It may be possible to protect some of the money from the sale of the home, but it will probably not be possible to protect all of it. You really need the help of an attorney in California who is an expert in Medi-Cal, and who has a good reputation. I suggest that you search for such an attorney by going to http://www.martindale.com, and do a search for an attorney 1) who lives anywhere in the State of California (it doesn’t have to be close to where your mother lives); 2) with a “peer review rating” of AV or BV (which means he or she is rated by other attorneys as being both competent and ethical) and 3) practices in the area of Medicaid or Medi-Cal (but not representing the health care industry). The last time I did such a search, I found only 2 in the entire state of California who met all these criteria. When you talk to the attorney, make sure he or she has substantial experience helping protect assets for someone in your mother’s situation.

  18. 18 Sanford Okura

    @Donna – You don’t have to sell the home, but if your mother starts getting Medicaid benefits and continues to own the home, the government will probably be able to place a Medicaid lien on the home, which would enable them to collect out of the equity in the home, when your mother passes away, all the money they paid for nursing home costs. If you have lived in the home with your mother for 2 years or longer before she entered the nursing home, it may be possible to have the home transferred to you, without any penalty, BEFORE the lien is placed. If you did not live in the home for 2 years or more with your mother, selling the home may be the better option, because you may be able to protect some of the money from the sale of the home. I strongly recommend that you follow the same advice I gave SuLee above and find an attorney, but look for an attorney in New York instead of California. Don’t do anything until you find and hire the right attorney who can help you with protecting assets from nursing home costs in New York. Move quickly before a lien is placed on the home. Good luck.

  19. 19 Brenda Robertson

    Aloha from hawaii Brenda
    I have been reading about what medicaid can do. I am 62 and my mother is 86 in texas and needs to go a nursing home. She lives with two of her sons, one has been living with her for 10 years or so. My older brother that lives in his own home, wants all of us to put her in a nursing home so she can the care she needs. I do ageed. One of the social workers called the other day and told that they would own all of her home to pay for the nursing home. My mom she said she wrote a will along time ago, but no one has found it. I hate to see the government take what she has work so hard for. The home is worth about 70,000 This has not happen yet. What is the best way to handle the problem. The sons at the house are not taking the care she needs. I am sure going to take care of my home in hawaii before anything happening to me.
    Thanks so
    Brenda

  20. 20 Sanford Okura

    @Brenda – Generally, if an adult child (your brother) has been living with mother for more than 2 years before she enters a nursing home, and has been providing care to help her stay at home, a transfer of the home can be made to that child without causing any Medicaid penalty. Your family needs to find an attorney in Texas who is expert in Medicaid Planning to help you with this situation. You need to find competent legal help right away, because once the government does place a lien on the home, it is too late. If you would like one of the attorneys from our law firm to help you, we could help find the right attorney in Texas, then act as co-counsel with that attorney. I hope things work out for your family.

  21. 21 Eliot

    Hi, My folks (80 and 76 years old) currently owe about 40,000 on their home (California) (value about 240,000) They have about 13 years left on their loan. They would like to lower there interest rate and we were wondering what the effect would be if we paid off there home and then created a legal mortgage (interest only). So they essentially would always owe the 40,000. How does this affect possible medicaid? and are we protected against a medicaid lien since we are now holding the mortgage?

  22. 22 J Chicago

    J. Chicago
    Hello from Illinois.  My father was diagnosed with Alzheimers three years back and about 2 years ago my father was admitted to the hospital and was eventually transfered to a nursing home.  He was in the nursing home for 5 months (100 days was covered by Medicare) and the rest of the days were billed by the nursing home.  My parents have not payed any of the bills and now the nursing home has filed a case in court for breach of contract in the amount of ~$15,000 against my father and mother.  
     
    I recieved some legal advise to ignore the case, since the only income received is from Social Security and Pension that cannot be touched and currently the home (worth $100,0000) is the only asset. I have a joint account with my mom (primary account holder) that they recommended to drop her name from the account which I did recently. 
     
    The legal opinion is that the case would end up putting a lein against the house and not touch any of the bank accounts (amounts in excess of the ~$15,000 that is owed) because the money is from SSI and Pension. 
     
    Questions:
    1.  Can the courts force my parents to pay the money from the bank accounts
    2.  Is there anything that can be done to save the house from a lein or is it too late since the case is going to court in less than 2 months.
    3.  The joint account name change will that be tracked back since it is after the summons was issued.

  23. 23 jennyliingwoo

    Hi, my husband had just suffered a massive heart attack 2 weeks ago.  He has been diagnosed with Anoxic Brain Injury and is currently incapacitated.  He will be transferred to a nursing facility next week.  I was told that I need to apply for medicaid in order to pay for his nursing home costs after my insurance stops paying.  However, we do own a house together.  If I read your article from April 2010 correctly, as long as I continue to live in the house, medicaid will not put a lien on my house.  Is it still true now?  What if I cannot afford to pay the mortgage and decided to sell the house at some point, what will happen?  Will medicaid ask for a portion of the sale (even if they DID NOT put a lien on my house yet since I am living in it)?  Since the house is under both of our names, will I be able to sell the house without my husband’s signature?  I am at a loss with this sudden illness and I will be very grateful if you can help me!

  24. 24 jennyliingwoo

    I forgot to mention that my husband is only 47 years old and we live in Long Beach, NY.

  25. 25 araucci

    My mother’s house is in a living trust since 2000 and her name is not on the deed anymore, she is in a nursing home now getting medicaid, if she past away is medicaid due any money if house gets sold.

  26. 26 Pollye

    MY PARENTS GIFTED OR GAVE ME OR I INHERITED THERE LAND ALMOST A YEAR AGO. I HAVE JUST PUT THEM IN A NURSING HOME .. NURSING HOME SAID I HAVE TO RETURN THE DEED INTO MY PARENTS NAME SO THEY CAN GET MEDICARE WHAT DO I DO?

  27. 27 Pollye

    IS THERE ANY HELP TO QUESTIONS ON HERE?

  28. 28 meff

    My wife was named joint tenant with her mother in 2000 on some farm property and her home.  They are both in nursing homes  I am conservator & guardian for my wife & have power of attorney for my Mother in law.  My mother in law has run out of money.  Must I sell the farm property or house for her to qualify for medicaid in Kansas?

  29. 29 aaron

    I’m been disabled and kept resident with my parnts ,my mother was in nursing home when passed I was my dad care taker he also pass I’m 65
    And been disabled since 2005 ,Mentaly reson, panic attacks also ,in 2007 I discovered I have Lekimia non cured . The home was transferd
    And is under my name ,the will specify the house upon my parnts passing to be shared equally with my brother . What are my right as far as the home mediaid also forgive the cost of the nursing home were my mom stayed .due to my Disabilty … Please advise I live in texas .

  30. 30 Suzanne Hara

    My Mother is 94 years old and she gave her property to my sister and I over 20 years ago with a life estate interest clause. We have paid for the property tax all these years. We recently sold the property because she is unable to care for herself and she lives with my sister. She suffers from dementia and various ailments. She is unable to walk now and we were informed that she could stay at a care facilty for two weeks covered by medicare and thereafter we will be charged $9000/mo because she sold her home. My sister and I are paying the capital gains tax on the house. Since it has been over 20 years since we received the property, why do we have to pay. She only has enough in her account and to cover 7 weeks. Do we have to pay out of pocket for her care because we sold the house? What percentage belongs to her before we can consider her destitute?
    My sister cares for her at home but I was told she can receive assistance for her care. Do you know whom I should call?
    Thank you for your assistance.

  31. 31 MrsMcGuire

    I see a lot of interesting questions on this subject but also it seems like good luck getting an answer. I’m in kind of the same boat as some of you. What I recommend is to review the medicaid laws for your state.

    I’m in VIRGINIA and what the information here says about farms is that any income producing properties are exempt from being taken.The home will be exempt if it’s given to a person who has lived in the home for two years care giving for the homeowner as long as the care giver lives in the house.The home can be transferred to a disabled child,a sibling who has a legal interest in the house and the house may be exempt if a hardship can be proven if the house is taken by the state. For anyone who hasn’t applied for Medicaid or Medical yet I strongly suggest contacting an elder lawyer to see how to salvage at least some of the assets if possible.
    My mother gifted the house to herself from my dad in 1995 as his POA he had strokes. She then had predators living with her from 2008 to 2010. She had made me her DPOA medical POA as well. She never gave me a copy, The way I ended up with all of the important papers deeds, wills POAs is she wanted me to remove them from the safe deposit box so she could look at everything and I never put them back.It turned out to be a good thing because the male was able to forge my mom’s signature and had in fact forged checks. They ordered checks in my mother’s name only when I am also on the account. Long story short it came to my attention that they were planning on tricking her into giving them the house but thankfully she got sick and I found out. She went from hospital to rehab so while she was there I used the POA to evict them. She liked to complain to them about me and about them to me but not want me to say anything. I contacted her attorney who turned out to be useless as he put it she had her mind so she can do what ever she wants and it’s true too. I found an attorney who looked after both of our interests and we were able to convince her to gift me the house. He did just that a included a life estate in 2011. Now she needs long term care and needs medicaid to pay for it. It looks like I will end up losing the house because if I don’t sign it back over to her there will be a penalty period of about a year and I am physically unable to hold on for that long to keep the house. It was gifted to protect it from being stolen not to protect it from the state. One thing all of you can definitely take away from this post is to get your own attorney. Your parent’s attorney is not your friend. At least this was my experience with it.

  32. 32 Ethan Okura

    @Aaron – Texas has different laws from Hawaii where we practice law, but in general, the Federal rules do allow for transfer of a home to a disabled child who lives in the home with no penalty for the Medicaid applicant parent. If you now own the home directly, your parents will does not control what happens to it when they pass away. You may give a share to your brother if you would like to honor your parents wishes, but unless you signed some other agreement, you are under no obligation to do so. Medicaid should not be able to come after your home for expenses they paid on your mother’s behalf. Best of luck!

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