Protect my mom's house from Medicaid should she land in a nursing home.

[jschaefs]

I recently discovered that my 74yo mom's house is still in her name. When my dad passed years ago my uncle had handled the trust and all the finances. I assumed he had moved the house to the trust but was recently informed while visiting him that wasn't the case. I feel dumb for not having noticed this sooner.

Fortunately my mom is healthy. However she is 74 with two replacement hips and works full-time (she has no hobbies so cleans offices at a local clinic). So, I do worry about something happening and her landing in a nursing home. Thanks to working and having low expenses, she has money saved and will be able to pay for some of her care. But considering the high cost of nursing home care, at some point the house asset would be needed to pay the bill.

My understanding is that Medicaid has a five year lookback rule, so even if she were to gift or sell me the house today, there would still be risk of losing the house if something happened in the next five years. Same if we move the house into an irrevocable trust. I'm wondering if anyone knows of any clever ways around this or other options?

Perhaps we're best putting the house in an irrevocable trust and crossing our fingers that we won't have any need to apply for Medicaid in the next five years. But, I'd prefer a strategy that didn't rely on hope!

[former player]

You need a legal/tax/medicaid expert in your own jurisdiction to tell you what is legal and possible.  Getting convicted for fraud is the worst of the possible outcomes.

I can understand that people like to have inheritances, but people having inheritances at the expense of the taxpayer, most of whom are poorer than the person who wants the inheritance, is a bugbear of mine.

What is your mother's view on all of this?  It's her house, her life, her choice as to whether she ever goes into a nursing home and her choice as to how it is paid for if she does.

[Roadrunner53]

I would suggest you buy this book.

How to Protect Your Family's Assets from Devastating Nursing Home Costs/Medicaid Secrets 2021 Version by: K. Gabriel Heiser, Attorney

If you buy this book from anywhere, make sure you buy the most up to date version. Many sellers are selling old versions from years ago. They will be out of date for the new laws and rules. This book seems to be updated each year so you might want to wait till 2022 to get the most recent version. The book is not cheap but well worth it.

I bought this book and have the 2014 edition. It is very well written and easy to understand. If I were you, I would read this book and have a notebook to the side to jot down all the pertinent information related to you and your mother. Plus, have some post it tabs to stick on pages you want to review. Once you have absorbed what the book says, then see an elder attorney and ask all the questions. After reading this book, you will have a greater understanding on what you can do and cannot do.

My Mother passed away and didn't end up staying very long in a nursing home. Medicare covered her short stay. Reflecting back on things my Mom and I should have done at minimum would have been to put me on the title of the house as a joint owner and  same with her car. It would have made probate a little easier. However, I was an only child so probate went pretty easy and the judge allowed me to sell the car and house right away. The one smart thing we did do shortly before she became very ill was to put my name as joint owner on her IRA's, checking accounts. That made for an easy transition. One of the hardest thing was some of the stocks Mom had. They were in paper certificate form and the companies names had changed over the years. I had to mail them to the companies and eventually they were sold and I received a check for the value. I had to send death certificates to the companies with the paper stocks.

Your mother may never go to a nursing home and many people who are very sick don't live very long in a nursing home. It was one of the darkest times of my life to see my Mother in a nursing home. Wishing you and your mother all the best.

[Fishindude]

What's the downside of an asset she owns going to pay for her care?
If her cash runs out while she's still in care, the house may be the only source of funds left to pay for care.

If you want to keep the house in the family, buy it from her now and rent back to her, or make other arrangements for her to live there.

[Dicey]

What's the downside of an asset she owns going to pay for her care?
If her cash runs out while she's still in care, the house may be the only source of funds left to pay for care.

If you want to keep the house in the family, buy it from her now and rent back to her, or make other arrangements for her to live there.

^100% this.^

[jschaefs]

What's the downside of an asset she owns going to pay for her care?
If her cash runs out while she's still in care, the house may be the only source of funds left to pay for care.

If you want to keep the house in the family, buy it from her now and rent back to her, or make other arrangements for her to live there.

^100% this.^

Yeah this was my first instinct as well. And very likely what we'll end up doing. But, there's still the fiver year lookback issue under this scenario.

[ixtap]

What's the downside of an asset she owns going to pay for her care?
If her cash runs out while she's still in care, the house may be the only source of funds left to pay for care.

If you want to keep the house in the family, buy it from her now and rent back to her, or make other arrangements for her to live there.

^100% this.^

Yeah this was my first instinct as well. And very likely what we'll end up doing. But, there's still the fiver year lookback issue under this scenario.

Neither option runs into the lookback. If you buy the house from her, she has the cash. If she keeps the house, she has the house to sell when the time comes.

[jschaefs]

Your mother may never go to a nursing home and many people who are very sick don't live very long in a nursing home. It was one of the darkest times of my life to see my Mother in a nursing home. Wishing you and your mother all the best.

Thank you for the book recommendation. I'll check it out. Much appreciated. I'm sorry to hear about what you went through with your mother. We went through a five year long nursing home ordeal with my Dad. I'm hoping we don't have to repeat it. Thanks again for your help :)

[PDXTabs]

You should really talk about this with your mom and find an attorney in your state if she wants to deal with this. The last time I talked about this with my mom she was unwilling to take her assets out of her name.

Some states have large exclusions of home equity if you "intend" to live there: https://www.medicaidplanningassistance.org/medicaid-eligibility-washington/

I believe that other states let you will the house to your child that took care of you in the home, but I am not an attorney and this is not legal advice.

[Villanelle]

What's the downside of an asset she owns going to pay for her care?
If her cash runs out while she's still in care, the house may be the only source of funds left to pay for care.

If you want to keep the house in the family, buy it from her now and rent back to her, or make other arrangements for her to live there.

^100% this.^

Yeah this was my first instinct as well. And very likely what we'll end up doing. But, there's still the fiver year lookback issue under this scenario.

How does the look-back come in to play if she sells the property to you? There is nothing to look back on.  She sold an asset. That means that now she has money instead of a house.  No problem there.   If she gave it to you, it might be an issue, but selling it for approximately FMV does not generate any hiding of assets, which is what the look-back is designed to prevent or undo.  (I am not a lawyer or tax professional, so my advice means nothing and is worth nothing.  But think about it logically, and then research more if you must, and I suspect you may come to a similar conclusion.)