Can I make payments to repay asset transfer?

Let me see if I can understand the situation.

Your mother is a co-mortgagor (co-borrower) with you (and someone else??) for the loan on your house.

Who holds title to the house? Is it held jointly between you, DH and your mother? Or do you hold title as sole owner?

I see 2 possibilities: you own the house, your mother guaranteed, but did not execute the mortgage or mortgage note.

Or: you, your mother and possibly someone else hold title jointly and each of you signed the mortgage.

What is the "new money" and when is it expected?

I'm going to pass on the other Medicaid specific questions because I'm not that knowledgeable on that subject.

But what I don't understand is whether your mother is a fee holder as well or has just co-signed your mortgage. There's a big difference.

In the meantime, if despite the loan modification it is still difficult to maintain payments on the house, have you investigated moving to subsidized housing? Maybe an apartment, although sometimes apartment rentals are higher than mortgage payments.

During the recession, borrowers whose homes were in the process of foreclosure were provided lists of counseling agencies that might be able to offer assistance, including with loan modifications. Perhaps you could seek the help of an agency like that.

Another alternative, which isn't particularly desirable, but I've done it when I had to, and that's to work 2 jobs.

GA all very good questions, I will add a few:

Where did mom reside prior to nursing home?
What are her conditions that require nursing level care?
If with you did you provide medically necessary care that could be documented with doctor verification?
If so, how long did you provide the care?
Have you met with an elder law attorney to discuss available options?

I am not trying to be intrusive. If you provided care for her in the home keeping her off Medicaid recovery may not apply.

Thanks for the responses. Mom and I own house as Joint Tenants. We've lived together for more than 10 years. She had a stroke and I cared for her for 4 years. She entered NH after a fall and can't come home. Medicaid said go ahead and transfer her 50% of house to me after she was enrolled. New money coming will be inheritance. If she was still living at home, she could pay down mortgage. I need to know if there is a way to use her inheritance on the mortgage or will Medicaid force repayment in full upon her death?

You need to talk with an elder law attorney. Depending on Medicaid rules in your state you should be able to keep the house. Since mom is on the mortgage an attorney can advise you beston how to deal with this. Make sure the attorney is NAELA certified as they are expertsin these issues.

Also, she will go off Medicaid when the inheritance comes. She will have to private pay at NH and then go back on Medicaid if she outlives her money. There will be a penalty period of ineligibility to budget for, but it's the repayment of her pre-inheritance care that I'm trying to plan for.

Elder Law Atty will only answer the questions i can think of to ask. He did say that putting money into an annuity to pay for NH would help keep monthly rate same as Medicaid rate rather than increasing to private pay rate. This would help make money last longer.

Medicaid permits home ownership. What if she paid off the house, then gifted to you for her care? There has to be a way to do this since you provide four years of care. Go to the website AVVO to ask some initial questions of attorneys in your area at no charge. Maybe you can find one that is NAELA certified at the same time.

I believe that if you put the funds into an annuity in your mother's name, a penalty might be incurred if the funds are withdrawn early. My attorney told us that annuities are not wise investments for older people because the people sometimes die during the period in which penalties are incurred for withdrawal.

Talk to a Lawyer now. If house is not in her name and you use Mom's money for Your benefit ie pament on house you have 100% interest on and not Mom's care, that is gifting. She is not on house, only on mortgage? the money will be traceable and questions will come up. If you cannot afford house mortgage without her money and have already done loan mod, you need to consider short sale or default unless lawyer has another idea.

Payment, sorry phone screen small.

Annuity? Omg for someone elderly? Annuity is usually a very very bad idea as the $ is locked in and if she needs the funds there will be huge costs to liquidate it. Meanwhile whomever was the insurance agent for it is getting a pretty nice fee. No matter how it's positioned annuities are insurance products with a pretty good initial fee or commission paid to agent and then afterwards for as long as its in force.

Ask the attorney what the commissions & fees are on the annuity and ask if either he &/or the insurance agent will waiver their commission & fees in writing.

Also most annuities are not Medicaid compliant. They get marketed as products to avoid probate, estate taxes,etc. A Medicaid compliant annuity has to be done actuarially sound (to specific actuarial tables based on elders age) and wholly payable to state on death & usually with a limited commission/fee structure. If they are kinda old, they won't meet the actuarial table to get the payout complete within their expected lifetime. Comprende? What happens often with annuities is that to get the amount low enough to be combined with their SS&retiremnet income, the annuity pays out till the elder is in their 100's. That won't be actuarially sound as their age out would be maybe age 90 for white females in your state.

Since mom is on Medicaid, there is a huge database existing on her. The inheritance will take her over the allowed asset limit by Medicaid.

Personally I'd take her off Medicaid and do private pay at the NH she is in now.If your state makes them repay costs paid to date, she does that. Now most can't do this approach and the Medicaid tally is a debt against her estate after she dies. Then in this interim period mom private pays for NH, yiu msy need to personally sign off on an agreement on this too, mom buys a prepaid in full funeral & burial, and if mom has debt she uses her $ to pay on that debt. If mom legally has part of the mortgage as her debt, she pays her part. Only her part & to the penny. I'd 86 the annuity promoting attorney and see a NAELA one ASAP to provide what options are best for how to have mom pay on her legally responsible debts & get a plan on how your state approaches recovery. You need to get on doing whatever to get the caregiver exemption. Good luck.

I have a similar question to add to this one. My mom and I are on the loan, my husband was added to the deed for rights of surviorship once mom passes. Recently we removed mom off the deed and it is just me and my husband now but mom is still on the loan, husband is not. I realized there is a 3 year look back. We did not get the house refi'd in time. Mom is now on hospice in a facility. She is not on medical so I am not worried about that but I am worried about the credit card debt and medical bills that are not getting paid since she was put in this facility that takes her entire monthly pension except for $100. Will the creditors come after me since mom and I are on the loan on the house? Do creditors have that power to put a lean on a house? Once she passes she will not have an estate. All she had was her part of MY house. Any advice would be greatly appreciated.

Jab, you need to consult a lawyer quick. Depending on how you structured taking your mom off the deed, it may or may not protect your Mom or her estate from being being pursued by debtors. Real estate law is very tricky and varies state by state. Banks and other creditors can file a lien on property if they have an unsatisfied debt (especially house, if your mom is on loan and you quit paying on loan, yes they can start proceedings to foreclose). Creditors can pursue you personally if you co-signed on any credit cards with Mom. Please check into this before it gets more snarled with someone experienced in your state's statute of limitations on debts, real estate transfers, etc. Courts really look down on people transferring property to relatives to avoid credit card debt or Medicaid recovery. The look back is now 5 years in most places for Medicaid.

Well she is not on medicaid. I purposefully did not put her on medical (here in CA) because of all the red flags I heard about...and most nursing homes, that are acceptable enough to put my mom in don't take medicaid anyway...just private pay. I am paying the mortgage so there is not a delinquency on that. And I am not on her credit cards, thank GOD! It's the loan on the house that has me worried. I have spoken to my attorney and getting her off the deed helped, even with the look back. Does anyone have an answer about what happens to credit card debt once the person dies and there is no estate to pay off the debt? Are they forgiven? I have heard a couple different answers.

I think Igloo has the best advice. If mom's name is still on the mortgage, it would seem that the inheritance could be used to pay off her part of the debt. It probably depends on how the mortgage was written. If it is a significant amount, you may be able to renegotiate your mortgage payments to a lower amount after her payment. If I understand correctly, you are having trouble meeting the payments on your own, and need the inheritance to help you. I have one other thought, but I need GA and Igloo to weigh in. I think that there is a way that your mom can decline the inheritance and possibly let it pass to you. There is a legal term for this, and it would depend on the will, and whether you would be the correct and only person to whom the funds would pass. You would need to have an attorney help you with this.

Jab, let's separate the issues. And just to make sure I understand, I rephrasing to legal terms so I can also make sure I provide accurate answers. It's a lot easier for me to explain that way. If you don't understand, just post and I'll try to re-explain.

1. You and your mother are co-borrowers on the mortgage on your house, right? And at that time, you were both co-owners, or joint fee holders, and you both were named on the (Warranty?) Deed. Right?

2. If so, then you and your mother held title jointly on a deed, presumably a warranty deed, and you both had authority to execute the mortgage.

Subsequently you must have quit claimed (a deed by which interest is transferred from one person to another, but without the underlying warranties of a Warranty Deed) to you, your mother and your husband.

It's not clear to me whether he has fee (ownership) rights or just survivorship rights. This would depend on exactly how the deed was worded.

Then you quit claimed back to you and your husband, which effectively "removes" your mother's interest from the house.

3. Your mother then no longer had a fee (basically an ownership) interest in the house but was still a co-borrower, and therefore was still liable with you for repayment on the mortgage.

4. Technically, you are in default under the mortgage for releasing a co-borrower from fee interest. Residential mortgages from what I've seen typically provide a "no ownership" transfer clause which results in an event of technical default if the property is sold without the lender's permission.

Even though the house wasn't sold, the fact that your mother was deeded out eliminates her ownership interest in the house. That could technically be considered having transferred her out of interest and/or control of the house. Yet she's still liable under the mortgage.

In other words, if either borrower is released from fee interest in the home, that eliminates her interest in the house. That can technically be considered an ownership transfer, because her interest in the house has been extinguished. And generally that constitutes an event of default, UNLESS you obtained prior permission from the lender.

4. So your mother is still obligated under the mortgage. If you were to default, she would be named in any foreclosure action.

5. Factoring in unpaid credit card and medical debt, who is liable depends on how the cards were held - are both you and your mother's names on the credit cards?

See the second paragraph at this site for information on whether you would be liable for the credit card debt ( if the link is deleted, google "bankrate, credit card debt, joint liability").

bankrate/finance/debt/death-inherits-credit-card-debt.aspx

6. Yes, credit card creditors could have come after your mother's interest in the house but it's been extinguished since you've apparently quit claimed her interest out. So theoretically she has no interest in the house that creditors could access.

However, if you held the cards jointly, you could be liable for her credit card debt. If you were only an authorized signatory, you wouldn't. This is my understanding of the situation. However, I haven't done any legal research on this issue and am relying on the BankRate article I cited.

Medical debt would depend on whether you guaranteed or signed for any of her medical treatment.

7. However: the lender has a first lien on the property; that means its interest takes priority over any other debts, including any judgment a credit card company or medical lender might get. In other words, the lender is entitled to recovery against the house before any other creditors.

However #2, your mother no longer has that interest in the house. If the credit card and medical debt were incurred AFTER your mother's interest in the house was extinguished, they wouldn't have recourse against the house as your mother no longer had that interest, unless as stated above, you were a joint holder on the credit cards and co-signed or guaranteed her medical debt.

Now, if you think you're confused, just think of having to try to figure all this out to respond! I've read it half a dozen times, and hopefully it will make sense to you.

GSA, just a quick comment on your advice, which is good.

Assuming the credit card and medical debt was incurred AFTER the mortgage was recorded, those debts would be subordinate to the mortgage. This also would be the most common scenario as no lender is going to grant a mortgage subject to priority debt. Any such debt would have had to have been discharged or subordinated so the lender could take first position (I'm assuming that this isn't a HELOC loan under discussion).

Even if these debtors sued and got judgments, those judgments would also be subordinate to the mortgage, which without any information to the contrary is, I'm assuming, a first mortgage, which takes priority over any other debts (other than government debts).

You clarified my question on the joint credit card debt; can you advise whether you're liable for any of her medical debt as asked in no. 6 above?

However, if any of the credit card debt is held by some of the aggressive card holders, it wouldn't surprise me if they did try to harass and intimidate you into paying. If this happens, you can post back, or research the Fair Debt Collection Practices Act on how to challenge debt that isn't yours. This is a ways down the line if it does occur, but basically you would respond and cite the provision that the debt is not yours, you're not liable for it, and demand copies of any judgments on which the creditor is basing its claim.

State Attorneys General can also be notified of debt collectors who harass people.


There's another problem here and that's that there are 2 questions and answers ongoing at the same time.

Jab, you might want to repost your question in a new thread, and GSA and I can copy our answers over. AKDaughter's answer addresses the original post.

So you can see why it's always a good idea to start your own thread.

Jab, one more comment. I'm surprised your attorney didn't suggest contacting the lender to address removal of your mother's obligation under the Mortgage, if that's the attorney who prepared the deed eliminating your mother's interest.

Jab - you have been given some really good & precise advise.

I'd suggest you find your mortgage agreement pronto. Read to see how name changes affect the agreement and how you are to notify the mortgage holder. As others have said, you cannot just take moms name off property & add on hubs. Doing this voids the mortgage agreement - which is an enforceable obligation - and the mortgage holder can call in the mortgage in full usually with 30 days to pay off.

I bet you did a quit claim on this, right? A quit claim doesn't mean squat as neither mom nor you own the property to be able do this if there's a mortgage. You are selling something you do not own.

Quit claim deeds can be a hot mess to deal with as there is never ever a guarantee of ownership with a QCD. Only a warranty deed does that and you would need to file the Release of Deed of Trust at the courthouse once the mortgage is paid off to show true ownership with no obligations. QCD - also since no guarantee - can require a quiet title action to be done in order to ever sell the property in the future if the future buyer needs a mortgage (like the mortgage provider won't underwrite as no ownership established) OR if you ever need to use property as collateral (again lender won't underwrite). For more fun in this, quiet title action can take anywhere from 2 to maybe 6 months to do due to legal notices (usually a summons) appearing in newspaper & need exoerienced real estate legal to deal with the process.

QCD do work well when couples are divorcing and 1 gets the house and the other QCD their share, but this is wrapped within the divorce legal so there's a judges signature.