2TiredinFlorida Asked October 2012
Should I put the house in my name?
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If Mom were to go into a nursing home. From what I understand, they could take her house. I also live there as her caretaker! If this were to happen, would they be able to take it, and evict me. If so, would it be better to transfer ownership to me, as I am her only child? The house as well as everything is willed to me.
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I have a DPOA that will allow me to establish the trust for her. Now I have to begin collecting deeds and stock certificates.
Texas Administrative Code:
TITLE 1 ADMINISTRATION
PART 15 TEXAS HEALTH AND HUMAN SERVICES COMMISSION
CHAPTER 373 MEDICAID ESTATE RECOVERY PROGRAM
SUBCHAPTER B RECOVERY CLAIMS
RULE §373.213 Deduction Allowed for Expenses for Home Maintenance and Costs of Care
(a) An amount equal to necessary and reasonable maintenance expenses and taxes may be deducted from the Medicaid Estate Recovery Program (MERP) claim for maintaining the home of the deceased Medicaid recipient, provided that sufficient supporting documentation of these expenditures, such as receipts, is provided to MERP by estate personal representatives, heirs, or legatees. Necessary and reasonable expenses for maintaining the home include real estate taxes, utility bills, insurance, home repairs, and home maintenance expenses such as lawn care.
(b) An amount equal to the necessary and reasonable expenses for the direct payment of the costs of care (including payment of personal attendant care) provided for a deceased Medicaid recipient that enabled the recipient to remain in his or her home and thereby delayed the institutionalization of the Medicaid recipient may be deducted from the MERP claim, provided that sufficient supporting documentation of these expenditures, such as receipts, is provided to MERP by estate personal representatives, heirs, or legatees.
(c) Requests for obtaining allowable deductions from MERP claims for expenses under subsections (a) or (b) of this section must be made in writing within 60 days after receipt of the Notice of the Intent to File a Claim by MERP.
All supporting documentation must be attached to the request and sent to MERP, Home Maintenance/Costs of Care Request, P.O. Box 13247, Austin, Texas.
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All states have MERP exemptions, but you have to file for them and do so in a very timely manner. MERP is a legal process and whomever does MERP in your state has to determine if they will proceed with the MERP claim in the first place.
That is why you have to get the stuff in asap after death, so the determination can be made if a MERP legal action will even happen.
My mom is in her mid90's and really if they live long enough, imho, they will eventually run out of funds and the caregivers will run out of steam and family will run out of nice. NH run from 4K to 10/12K a month and add whatever full freight private pay medical and ancillary services and easily you can "plow" through an easy 6 figures a year for a NH stay. And that could be $ better spent on farm needs.
I'm assuming you all are concerned about capital gains? I know for houses, if the house was bought a long time ago like 1950’s/60’s, could be a big $$ in capital gains. Now you can homestead the property before you sell it and avoid capital gains. I think it’s 3 out of 5 years homesteaded to do this. But you have to make the home your principal residence and file for homestead. I don't have any idea if this works for farms but it's something to look into.
If mom has a life insurance policy and she owns it, look into have the ownership of the policy changed so it's not an asset that she owns.
About farmland and ranches, if the elder's homestead is within a working family farm or ranch, then it seems to be that the whole property is an exempt asset for Medicaid while they are alive and qualifies for an exemption under MERP (Medicaid Estate Recovery Program) after they die. Now the Medicaid application will likely get evaluated by a specialist within the program because ranch land, farmland are pretty complex and above the usual caseworkers level. But really if you can talk with legal about moving it all from under her ownership now and into an LLC and perhaps a special needs trust set up from proceeds from the LLC.
If you're looking at a significant amount of $$, I'd seek the advice of another professional to see how they would structure changes. Since you're getting a legal viewpoint, maybe speak with a financial advisor. Personally, I suggest speaking with a stockbroker who has a series 7 license with a book that has other farm clients and is with a wire house (so if there is a problem they have a compliance department to go to for those issues). Good luck!
A: Not unless the POA says you have control over her financial transactions/bank accounts. And if your name is on her account you had better be sure you can justify what you are spending her money on. Anything that would be considered income that should have gone to her care that you used for something else would be a problem not only in qualifying for Medicaid (you have to explain her expenses and provide proof for those considered "deductible" toward her eligibility) but also could get you in trouble with Social Security if you are her representative payee as well.
When you sell a home, you may become ineligible for Medicaid. Though Medicaid doesn't consider your primary residence to be a countable asset, it does count the proceeds of the sale. If the profit you make from the sale causes your assets to exceed Medicaid's limit, you will no longer receive benefits. However, if you spend the money from the sale over time, you can reapply for Medicaid once your assets are below the limit.
To remain eligible for Medicaid after selling your home, you may consider spending the profits to stay below the countable resource limit or transferring the assets to another individual. While Medicaid can't prohibit you from spending your money, you may become ineligible for Medicaid if you transfer funds to someone else. If Medicaid discovers you have transferred assets for less than their fair market value to be eligible for coverage, it may terminate your benefits.
If they have a home, they will not have the funds to pay for anything for the home (which is an exempt asset) as the personal needs allowance is easily spent on NH related items (like hair salon or cable) or clothing needs or the items that neither Medicaid or Medicare pay for. For my mom, her $ 60 a mont is easily hair salon visits and candy from the canteen.
If you live in the house, you are expected to pay for the expenses for the house. For many caregivers, there is no $ to do this. This is especially true if there still is a mortgage on the home and the family living at the home doesn't have an income as they have been doing caregiving without pay. This is where it gets sticky for family and why you & your mom need to see an elder care attorney who practices in your state and preferable in the county where the home is located. Having a home has a whole set of issues regarding exemptions and how the home is dealt with after death via MERP - Medicaid Estate Recovery Program. There are exemptions regarding homesteads and caregivers; exemptions if a home is actively on the real estate market; exemptions on maintenance and other property expenses; the list goes on and the attorney will know what will be the best plan or options for you both to consider. Good luck.
Many, many elders do not have sufficient funds to pay NH for very long, if at all. In that case they usually apply for Medicaid, which does cover nursing home costs. All of Mother's assets would be expected to be used toward her care. She can keep a home and a car, but she will not have enough spending money each month to pay for insurance, maintenance, etc.
Because Medicaid expects people to use their own money before they use tax dollars, they "look back" at financial transactions for the last 5 years. If Mother has used $10,000 to put a new roof on the house, that is fine. She is using her money for her own benefit. If she gave $10,000 to you, that is not so fine, because that looks like she is trying to get out of spending her own money on her own care.
This can be very complicated, and mistakes can be very costly. I suggest that you consult an Elder Law attorney (that specialty is important -- this isn't the time to use your cousin the criminal lawyer!) and get things set up in the most advantageous way for Mother, legally. Yes, it will cost some of Mother's funds, but it is worth it!
If your mother signs the house over to you now, that will be considered by Medicaid to be a gift. Not Good.
Consult an attorney who specializes in Elder Law before making any changes in ownership if your mother will be applying for Medicaid.