If my mom ends up going to a nursing home, it would be a last resort. She is 96 years old, with a number of health problems including dementia.
I spoke with a lawyer today and he said it would be best if we could say that my mom intends to return home when admitting her to the nursing home. The problem is, I would have to wait until my mom is no longer able to speak for herself then I could use my POA to have her admitted. The other way is if she would fall and get hurt or become ill and the doctor admitted her to the hospital, she could be moved to long term care after 3 days if I don't feel I could care for her at home. I think her Medicare would cover 90 days in long term care and then she would have to be transferred to a facility with available Medicaid beds.
If she can't be returned home, Medicaid would require the sale of her house and car. Since she has a Life Estate interest in her house she is considered the life tenant and has the usage of the house for her lifetime. If the house has to be sold during her lifetime including while she is in the nursing home, she gets a % of the sale which is reduced by each year after the life estate was formed. Since the life estate was formed in 2008 and she is 96 now, the lawyer figures her interest might be less than 10% which would have to be spent on her care.
After she dies, the Life Estate vanishes completely leaving me the new owner. It does get more complicated because the rule on life estates was changed several years ago but this life estate was formed a long long time ago. The point is, it would be better if my mom would intend to return home even if it was obvious she never could.
Putting that sentiment on the paperwork would be fine. Because in all reality, if the above happened they would probably go home.
The care is sent to the home, and is 'covered' or free, as well as equipment like a hospital bed.
So yes, they can go home to die but, they lose their 24/7 caregivers.
I know a woman who remarried after the death of her husband. The new husband moved into her house. In her Will, the house went to her 2 children but with the stipulation that her now husband could live there till he died. At that time the house reverted to the 2 children. While he lived there his GF moved in little by little having a home of her own. His family kept telling her she needed to move her things out because he did not own the home. She didn't and when he died the daughter (living the closest) had to ask her to move her stuff out. No eviction, the woman had her own home to go back to.
I’ll repeat from my first post “it might be a good investment to pay for a second legal opinion”.
The posts are confusing as she mentions it being an LE of her parents, then dad dies so it’s mom solo on the LE and somehow mom does a Warranty Deed. But the atty is bringing up LE issues (10% interest) so LE is there. I don’t see how a WD layers over an LE of the moms as the mom is still alive,
For LE, in my understanding, property retains ownership by mom.... it stays in her name but with LE after it as recorded at courthouse. Title changed. LE allow mom to keep it for the run of her lifetime plus allow her to retain homestead exemption and any other elder perks on property the moms state, city or county have (like no late fees on city owned utilities) that an owner would have BUT IT IS ONLY UPON the moms death, that it then transfers ownership via the LE to whomever are named in the LE as the remainderman (sometimes referred to as beneficiary). LE transfer outside of probate. If that property still has it recorded as Mrs Jane Smith Jones, LE, as the tax bills get sent out, then it’s still all in an LE.
The outside of probate aspect of LE imo is why they are done.
MERP initially was done to deal with probate assets, so LE’s couldn’t be recovered. Some states since have taken an expanded view of recovery so that LEs are included as recoverable assets for MERP requirement to attempt recovery. The property stays under the moms control while she is alive; mom can sell it if she wanted to but the kids can’t sell it while she’s alive. So you can kinda see why States have expanded recovery onto LE’s. If the OPs state views LE as fair game for recovery, makes huge difference. It’s a answer for a Medicaid MERP savvy atty to give,
LEs are sticky in that if her mom were to sell it tomorrow, there would have to be a determination of % of ownership interest at the time of the sale and it’s established based on IRS based actuarial tables of the owner AND each of the remainderman get their set % of the sale based on that. That’s why OPs atty mentioned that her mom “interest at less than 10%”.
As an aside on this, we bought a post Katrina LE lot that had 80+ mom with 3 kids; caregiver son assumed that siblings would give their LE remainderman share $ to their mom; the other 2 siblings refused to do that, they each got their % remainderman interest $ with zero to the mom. The paperwork was done by a real estate atty but he brought in a LL.M atty (tax law) who did the actuarial breakdown. Not our cost but I’m remembering had a comma in it just for the tax guy. 2 siblings were not required to turn over their share of the sale to their mom, and didn’t. Fun family!
Regarding LE, there have been posts in the past on LE and that some states are now taking an expanded view of estate recovery and for LEs the state places a lien proactively on the property. Expanded view means state can include non probate assets, like an LE or irrevocable Trust. So it can’t be sold or title transferred as that lien is there. Lien is kinda subterranean and probably not attached to the chain on the property records at the courthouse. It’s the type of lein that the title companies find. But it’s there lurking.
More proproperty rights states (FL, Tx) do not allow proactive liens. Just what NE does, you need to find out clearly from an atty who does this type of real estate oriented work.
? do you or any other future heirs have any possible exemptions or exclusions to MERP? If you might, and can provide the documentation needed, that can offset some of the MERP tally for the heirs that can show exemption or exclusions. Your betting on futures, so runs risk.
I’d suggest that if you decide to have mom keep the home, you ask the atty to provide in detail as to just how NE determines how the remainderman interest is done and reported; and if NE MERP is done by outside contractor or done by the State and which division does it; and what the interest is like during recovery till things signed off. Good luck.
but before I digress on my take on LE (another post)... couple of things:
— on the “intent to return home”, LTC Medicaid applications have this as a standard item. Like for TX & LA LTC application it’s it’s own single page with a blocked 2-4 paragraphs that state an applicant can continue to own their homestead, what MERP is, that state is required to attempt recovery & why, you acknowledge its existence. It’s required to be dated and signed. Annual renewals of LTC Medicaid will send out another as well that too needs to be dated and signed. If not, Medicaid can be suspended or stop. Form is pretty perfunctory. Medicaid seems to accept “intent” & not challenge it, but I guess they could.
— that it continues to be a homestead & keep homestead exemption is important. For Medicaid to allow property to be an exempt asset for Medicaid, must be homestead. Homestead exemption is done by your tax assessor. If assessor requires butts-in-bed for a homestead to be done, then mom won’t get one as she now lives at the NH. She is not at NH as rehab patient but as a long term resident. You have to clearly find out if assessor requires owner occupied to get exemption. The state will let assessor know the “intent to return” is out there too. Assessor too can send out their own form or questionnaire that are time sensitive.
— & ime the most central part of keeping maw’s house drama, realize that the day the she applies for LTC Medicaid & from that day forward all her mo income basically required to become a copay to the NH as per Medicaid requirements. Copay required. All she gets to keep is whatever NE has as her PNA / personal needs allowance. Most have it at $50 or $60 & really that just covers her beauty shoppe visits and some snacks or toiletries. Mom will have no-nada-zero of her $ to spend on that empty home. So all property costs - taxes, insurance, utitlties, repairs, yard - will have to be paid by others from now & till beyond the grave. Insurance could go from reg, how owners to vacant dwelling policy which tend to be $$. It will take time to settle the legal niceties..... could take 6 mos or 6 years.
So if mom keeps that LE house, do you have the time, wallet and sense of humor to deal & pay for an undetermined period of time? And are you ok on running risk that should things not go as anticipated, you may not acquire the property? To me, it’s kinda like having a 2nd home that you don’t own. Most folks can’t afford a 2nd home & don’t like risk.
if LE has several siblings that benefit, that are remainderman, in theory, each should do & pay their share of property costs once mom applies for Medicaid. I’ve been on this site a long time & over & over again drama is everybody is all “guvmit aint takin maws place”, BIL to cut yard regularly, Sis to pay property tax, LB pays utilities. Lasts maybe 6-12 mos and then drops off. One sibling ends up paying & doing on a property that others will benefit from even if they don’t pay a penny. If this could at all be your situation, please pls take a hard realistic look at your siblings (& imo more importantly their spouses) as to whether or NOT they will do & pay till whenever forever on moms LE home.
if a parent wants to continue to own their home, Medicaid allows that. And you want to honor that desire, you can but it will have co$t$ & you need to keep meticulous records. It could make sense to do. But you have to be able to be in it for the long and possibly expensive long term.
This sort of asset protection for the heirs, making the taxpayer pay for an elder who has passed their assets to heirs already, is something I am not very in favor of. In the instances where the child is living with the elder and caring for them for many years without recompense, having given up their own homes, I sure can UNDERSTAND it.
I leave you to the advice of your Lawyer. Too complicated for me by half. You are seeking good advice where you should, from the experts. I will wish you the best going forward.
1): To whom do you want to say that mother intends to return home? To the facility when mother can hear, so that she thinks she may go home again? To Medicaid on some form? Or on some other sort of declaration? Will there be a Medicaid follow up if she doesn’t return, and if so when will that be? Are you thinking of some fudging, eg taking her back home with caregivers for a week or two, once a year, then back to the NH?
2): Is the issue to delay the sale of the house? Why? It will reduce the pay-out to mother, and what Medicaid can access. It will also reduce the pay-back to Medicaid if mother has died before sale, because then she won’t have any assets. Is this the point?
3): Or is the point that if Medicaid forces the sale of the house now, there is no asset left for you to inherit? Mother would be paid her share from the proceeds of sale, but Medicaid might take most of the rest.
4): Presumably you could buy the house now at a valuation which is subject to mother’s life interest. The sooner the sale, the bigger the deduction for mother’s interest, and the cheaper the house for you. Or could you cash out the current ‘market’ value of mother’s life interest, and put that into her assets to ‘pay out’ the future of the life interest? How would this go down with Medicaid? They might find it tricky to question the whole complicated deal.
5) Are you thinking of renting out the house while mother is in the NH? For a fixed term of say 4 years? How would this affect the immediate ability of sale by Medicaid?
6) How embarrassing would it be for you to get sued by Medicaid – ie how public a figure are you?
Posters on the site are not generally in favor of trying to ‘cheat’ Medicare out of reimbursement for the care of anyone who can afford to pay for it. However I can see the issues here – you are so close to the life interest terminating in the way it was expected, but just as close for the inheritance which was intended for you to get devalued.
This is so complicated that it might be a good investment to pay for a second legal opinion!