since medicaid uses all of her income to paid her expenses in the Nursing Home (she is 91 and lives in a NH facility). We have been paying the home with some of the rentals fees we receive from rentals my mom gave us 5 years ago. These rentals are in Puerto Rico. She lives in Florida now in a NH. Thanks Jeanette
If so, then those properties she gave you over 5 years ago are not her assets and not needed to be included for Medicaid. In reality you do not have to pay a penny of that rental income to anything "mom" but you choose to do so.
Now Moms house in PR with the mortgage, well she will end up defaulting on the mortgage and house going into foreclosure IF she goes onto NH Medicaid as Medicaid requires them to do a copay or SOC (share of cost) of all monthly income to the NH unless the rental income on this house can cover the mortgage and all other property costs. No more mortgage payment from her bank account. Some states allow for a limited few months of a waiver on this requirement for mortgage if property has a current MLS Realtor listing (but mom or her DPOA would have to apply for it). Pls realize that if mom applies & gets on Medicaid, once house sells all the $ from the sale less morgage balance has to be "spent-dwon" before she can get medicaid. If she were to ay off the mortgage but keep the home, the state is required to attempt a recovery of all assets in her estate after death. That house will end up being an asset of her estate.
It sounds like you & brother just dont have the $ to cover this properties mortgage & other costs if need be. It may be the best use of time & energy just to let the house go into foreclosure, stop the auto pay on the mortgage ASAP & have mom apply for Medicaid. Mom walks on mortgage and any costs on the house. Yeah it's harsh but reality often is.
Tessa - also another ? for you, PR real estate & legal runs pretty different.... when mom sold the other property to you & your bro 5 years ago, it was done all ok for PR with a "mortgage deed" (not a Deed of Trust like in US), &/or Certificate of Satisfaction and everbody signed all documents while on PR soil with PR notary and then actually registered& recorded in Dept of Justice?? Right? One reason imo why stuff isn't moving - even with Act 20 & 22 available - is that property wasn't transferred properly by those who moved to & are in mainland so sales can't be done as the titles are crap, clouds on ownership, old transfers not valid & going back decades and PR finally has gotten theAGs office organized in the property register division so its easily uncovered now. I'd suggest you asap get PR legal to review the old sale or transfer before Medicaid application cause if not ok, mom will have too too many assets from the old properties to ever be eligible.
!Buena suerte!
Do not co-mingle your rental incomes with hers. Keep it separate. Always.
Once the Lease starts to end on Mom's house, seriously consider selling the house. It can be sold "as is" so you don't need to worry about doing any fixing up. There are a lot of house flippers out there. You could sell quickly, depending on how much is left on the house mortgage.
Once the house sells, you don't need to worry about property taxes, homeowners insurance, or any major repairs that tend to pop up when you aren't looking, like the furnace needing replacing. One rental property I had, I had 3 major appliances all fail and had to be replaced with one month's span. That was expensive.
She can sell the house now and use the proceeds to fund her own care until it runs out, and then apply for Medicaid.
She can keep the house and her kids can continue paying the mortgage and upkeep. Keep absolutely all the receipts so those expenses will be deducted when the state wants their share of the proceeds.
She could rent the house out, with the rental monies being used for her care.
Was the gift of the rental properties made a FULL five years before she will apply for Medicaid. Any more recent than that will create some issues.
There are some exceptions regarding the state claiming the proceeds of the house sale.
I think it would be very worthwhile to use some of Mom's funds to consult a lawyer specializing in Elder Law, and learn what your options are and how various actions now will impact you in the future.