Comments on: Protect Your Home From Medicaid Liens – Part 3 (May 2010)

By: Sanford

Sanford — Thu, 24 Nov 2011 16:52:05 +0000

@Rebecca – Based on the information you provided, it appears that your mother owns the life estate and your brother owns the remainder interest. Even though the remainder interest owner does not have the right to use the property until the life estate holder dies, the remainder interest owner actually has a vested ownership right in the property. Unlike a beneficiary named in a will or revocable trust, the remainder interest owner’s right cannot be changed or taken away by the person who gave him that right. Therefore, the Medicaid office is probably justified in claiming that your brother owns property. However, he may be able to request a hardship exemption or otherwise plead for mercy on the grounds that it is very difficult to turn the remainder interest to cash. It is difficult to find anyone to buy a remainder interest, because most people are not willing to pay for property which cannot be used until the life estate holder dies. Of course,almost anything can be sold if the price is low enough, so if he cannot get mercy from the Medicaid office, he may have to offer the remainder interest for sale, and keep lowering the price until someone is willing to buy it. The problem is that the sale price will probably be lower than the fair market value, which is calculated by the IRS according to their tables and which is calculated by the Medicaid office according to their table. The Medicaid office could then declare that a Medicaid penalty should be imposed for selling the asset for less than fair market value. Your brother would then have to argue that it was sold for fair market value because no one was willing to pay more. Sorry, but this is not a simple situation for your brother. Good luck to your family.

By: Rebecca

Rebecca — Mon, 10 Oct 2011 03:28:17 +0000

Little different twist. Mother has life estate since 1977. Brother’s name is on deed. Brother in nursing home but has now lost his Medicaid because “he owns property.” Shouldn’t her life estate trump his “ownership?” We are in Virginia.

By: Sanford Okura

Sanford Okura — Wed, 06 Apr 2011 05:02:28 +0000

@ James – The law regarding life estates generally applies all over the United States and goes back to England several centuries. However, the way the federal law (and several states’ laws) define the “estate” from which the government can collect back its Medicaid payments after the recipient dies, it sounds as if the government could go after some of the property even after the life estate holder dies. For any state to try to do this would be going against several centuries of English and American law. The State of California considered taking this position several years ago, but decided against it. Just to be safe, you should check with a Medicaid planning expert in New York, to make sure New York has not decided to interpret its law aggressively. In Hawaii, the law is written like the federal law, making it sound like the government can go after property after the Medicaid recipient dies, even if the recipient only owned a life estate in the property. Just to be safe, our law firm has invented a special technique to guard against the possibility that Hawaii might try to change its practice and start going after property in which the Medicaid recipient only owned a life estate.

By: James Bermingham

James Bermingham — Tue, 04 Jan 2011 17:16:13 +0000

I read your artice and it was very informative. I live in NY state is what you are saying about a life estate lien being released after the life estate being released good there to.

By: sanford

sanford — Wed, 07 Jul 2010 03:55:21 +0000

@Glenn – A rental home, unless it has a large mortgage and little equity, would likely have enough value to disquality mother from obtaining Medicaid assistance for nursing home costs. Also the fact that the home property is in a revocable trust would probably disqualify her. It may be possible to sell one property but save the other, or depending on the facts, it may be necessary to sell both. Medicaid Eligibility Planning is a complex process that requires analysis of many different factors. Relevant factors may include: the value of the home, the amount of any mortgages on the home, the value of the rental property, the amount of any mortgages on the rental property; what other assets mother owns, and their value; the amounts of debts mother has; whether she has transferred assets for less than full fair market value during the last 5 years; who lives in the home with her, the relationship of persons living in the home with her, and how long they have been living there; whether she is considered competent; if she is not considered competent, whether her power of attorney and trust were drafted in such a way as to allow Medicaid planning, etc. I would highly recommend a Medicaid Eligibility Consultation, which is not a full Medicaid Eligibility Plan, but rather an analysis of all relevant facts to determine whether anything can be done to protect any of mother’s assets, and if so, what some options might be for asset protection. In many cases, after a Medicaid Eligibility Consultation, it turns out that a significant amount of the incapacitated person’s assets can be saved, even if little or no advance planning had been done. If you have not yet done so, I suggest you contact the Okura & Associates office nearest you for a consultation with an experienced Medicaid Planning Attorney to see where you stand with your mother’s situation.

By: Glenn Uehara

Glenn Uehara — Tue, 25 May 2010 02:10:44 +0000

My mother’s assets which consist of a home and rental property was placed in a Revocable Trust 10 years ago. She suffered a stroke 2 weeks ago may need to go to a nursing home. From reading your excelent artilces it seems we have no other alternative but to sell her property to pay for her care.

What would be the best way to do this?