My mom owns the house that I live in. She has not lived in it since 1998 and I have lived in it since 2007. She is wanting to go into assisted living but does not want me to have to move and give up the house. She will be private paying until her money runs out. How should we handle this?
In order for my own Dad to continue to enjoy living in senior living, Dad sold his house immediately in order to get the equity out of the house. It was a nice buffer so Dad wouldn't need to worry about running out of money for a few years.
The way I looked at it, my parents [Mom had already passed] had worked hard to pay off on that house and to keep it looking nice for 30 some years. It was Dad's money for him to use for his senior care and to be in an extremely nice senior community.
Example: mother transfers $250,000 house to you June 5, 2018. She will be assessed a penalty if she applies for Medicaid through June 4, 2023. Can mom private pay for that long at assisted living or nursing home? Can you pay all the expenses of the house - utilities, property taxes at YOUR rate (not mom's elder rate frozen at whatever age and property valued at current rates, not mom's special rates as elder), homeowner's insurance. If there is a mortgage, you will need to refinance the mortgage balance and provide records that YOU paid it all along - there will not be any money from mom to pay YOUR expenses any more without it being more gifting and the 5 year penalty goes from the date of each gift forward.
The penalty works like this: Let's use $200 per day as example medicaid rate. $250,000 house transfer (from the date of application if the $250,000 transfer occurred within 5 years look-back of application date with NO amortization day, so day 1 counts same as day 1,825). $250,000 divided by $200 means that Medicaid WON'T pay a dime for the first 1,250 days of care. That is almost 3.5 YEARS from the date that she applied - you know, the date when she was already impoverished and had no money to pay for care above her $2000 in assets. If you have the money to pay for all house costs from date of transfer and person is in VERY good health to cover 5 years from date of transfer, you might be able to do it. Check with lawyer.