Got a house to rent? Medicaid will stuff it into its maw.

Follow
Share

NO ONE, absolutely NO ONE, told us if we rented the house that was transferred to us 10 years ago, if we rented it out after mom went into the nursing home, that MEDICAID considered it MOM'S income. Not ours. And now those b*stards,they want us to turn all the money from the rent over to them. Medicaid. NO ONE ever thought to mention this, the nursing home, the lawyers, the tax prep people, my brother who supposedly knows EVERYTHING. We thought it was the 8% cut they wanted because, life tenancy for mom in the house. No, they want it ALL. When the house is sold someday, then Medicaid will get the 8% from that. I am horrified. Our taxes have been done already, we paid taxes for renting out the house, and then we get a letter from Mediciad saying 'you owe all the rent.' So it's not even our house, we paid taxes on MOM's HOUSE???? So what does that mean as far as the taxes? I am beyond horrified. My husband told my brother long ago, "if you want to be a long distance landlord, go ahead, but leave us out of it. I am advising you to sell that sh*tbox 'as is' and don't rent it, try to squeeze out some big profit from it, it's now in a slum neighborhood and who would pay out the nose?" OMG. I told my brother he better find himsself a lawyer. I'm not giving him a cent. .... I have done all the heavy lifting here with mom, I have lost years off my life being a 'caregiver' until I finally got her into a nursing home. Thought we were done. And here is a new sh*t storm falling on our heads, it simply doesn't END! So it's not our house but still my mother's?? Let Medicaid go dun mom up at the nursing home, they will get a big fat smelly diaper for their troubles!.....No one told us. OMG.

This discussion has been closed for comment. Start a New Discussion.
Find Care & Housing
13

Comments

Show:
Wow. What a mess. And the worse part is that it seems this has the potential to become an even bigger mess. I'm lost in all the Medicaid lingo here but I do know one thing: no matter what you've got to be with your husband on this. You recognize that your brother isn't quite as smart as he seems to think he is and the way he is going about this seems to be making things more difficult for everyone concerned. So the last thing you want or need at this point is for this to blow up and have your hubby all p.o.'d and saying "I told you so". This has the potential of a lifetime of "I told you so's" and personally that would certainly drive a wedge in my marriage. But you know all this. If I were you, I think I'd consult an attorney and see if there was a way to wash your hands of this cluster F - if your brother can be a little more flexible and realistic. And - we probably all know "that person", the one who thinks everything is worth more than it really is - always looking for a way to turn crap into diamonds. They never really seem to understand or participate in the tremendous amount of work involved in making that little trick happen - if it is possible to happen at all. And let's face it - is it ever really possible?
(1)
Report

So Lassie come home ain't happening? Sorry couldn't resist!

Ok then, I'd be very concerned that mom will be ruled ineligible for Medicaid over rental property snafu. If rental was not disclosed on the Medicaid application & renewals, and family isn't being cooperative now with paying rental income within moms SOC, the state could suspend moms eligibility. What is problematic in this is that it could be retroactive to day 1 of NH stay AND the NH gets a letter this is being done SO the NH gets a clawback of payments paid by the state. It could be a significant sum of $$$. NH expects to get paid and will do whatever to get paid. If mom is not paying the rental property income to the NH as a part of her required co-pay or SOC (Share of Cost), then mom is out of compliance for the Medicaid program so NH can issue her a 30 day Notice (basically an eviction letter). The 30 day usually means she either moves back home with family; or family signs off on a financial Responsibility agreement for past due & monthly fees. No other NH will take her either unless she comes in as private pay as the Medicaid problems will show up. If a resolution doesnt happen, NH can contact APS to get mom made an emergency ward of the state and court appoints a guardian. If ward of state happens, guardian will now be in charge & will decide what happens with that house.

At my moms first NH, this happened to one of the ladies in a room in my moms wing. Her son (a real Azz IMO) sold her home after she went into the NH. & state found out. Son flat refused to deal with Medicaid & NH apparently for months. One day he was there yelling in the hallway as his mom was gone. A ward of the state had been done and guardian moved the little lady to another NH. I just cannot imagine how traumatic this was for her. Cops were called on the son too. The NH probably sued him or turned the account due over to collections. It can & does happen.

So who is DPOA? They have a fiduciary responsibility in all this.
- Who signed the admissions agreement - mom, you, bro? If you personally signed any of the many pages of the agreement, then you could be held responsible.
- Who submitted the documents required for the Medicaid application, like moms awards letters, banking, etc?
- If mom has had medicaid renewals, who signed off on those?
- Who has gotten & is getting the correspondence from Medicaid? These tend to have specific & very tight time frames for documents to be submitted or appeals to be filed. If info isn't submitted on their timeframe, mom will likely be found out of compliance and ineligible. If its your brother, I'd suggest you send a fax & certified mail to medicaid requesting copies on all correspondence especially the ones that state moms required co-pay.
- What is happening with moms personal needs allowance?
- Are there any other issues lurking about? Like if the state asked for 5 years of bank statements and taxes, will there be questionable spending that could trigger a transfer penalty inquiry? I'd be real worried that all this has red-flagged mom and her whole application get re-reviewed.

? is is you or bro that lives where mom is? Its you who lives in moms state, (so bro lives in another state), correct?

The answers to the above are about finding out who's up for liability in this clusterF.. The whole situation probably imho has morphed beyond any DIY action. You (& hubs) need to schedule an appt with an elder law atty - I'd suggest one that is NAELA - to find out what needs to happen for mom to remain on Medicaid and remove you from liability. I'd gather up all the house documents and last couple of years of assessor statements on house & do a "face sheet" on mom in advance as it will make atty costs lower. The face sheet should detail moms life like DOB, all marriage, spouse & children info, details on all property, etc. Every day you delay adds onto NH costs that someone will be found responsible for.
(0)
Report

We just went through this. Mom put her home in her childrens' names 20 years ago, but retained Life Tenant. It is a duplex. All the NET rent income from both sides helped pay for her at Assisted Living. We were told not to include the house in her Medicaid application (NY). We were told NOT to sell the property or NY would insist she got a percentage of the proceeds as she was a Life Tenant; at age 86 she would get 30% of the sale proceeds.
She died. We were told that out basis cost of the property was the market value on the day of her death. We sold it within a month. So after the closing costs were paid, we actually had a small net loss.
(1)
Report

igloo: My husband hates my brother. (That's it in a nutshell. He doesn't want us to be involved in all this. He thinks my brother isn't as smart as he thinks he is. He will not pay one red cent for anything involved with this. He wants the house sold 'as is' - tomorrow.) I can assure you, my husband is no financial expert. When his mother died, he called a real estate company and the Salvation Army to come and take the furniture. The house was sold 'as is' within a month. I went over there twice to take out some clothes and valuables, left a note for the Salvation Army to take everything in the house. That was it, the. end...My brother thinks he can get some 'better' money by selling it on the market, 'I am not going to just GIVE it away'. The renters want to buy it but won't be able to for a year or two. .... So here I am in the middle of the two of them, as usual. I would love to be rid of the house, I don't care how much it goes for, I'm on my husband's side. But there's my brother across the country with his long-distance landlording, who is supposed to take care of the financial stuff, and it seems he does NOT know everything.
(1)
Report

Lassie - so exactly how is the property recorded at the courthouse? How it precisely reads is critical in all this.

If it was transferred to you & bro, recorded in both names and so you both have been paying full tilt & no-exemptions taxes based on that, then it's your & bro's asset. And doing this now for about a decade.

BUT, I'm gonna guess that it has not and been kept in moms name in eome way so it has gotten a homestead exemption and a whole bunch of other over 65/senior citizen exemptions as well. Mom has a life tenancy which allows for this but it also means she retains a degree of ownership. Just what & how will depend on your states legal & you need an qtty to dal with this.

Medicaid requires that they pay whatever income they get each month to the NH as their copay or SOC (share of cost). Rent is income and it needs to be fair market value rent. Not a special deal.

I'm going to go out on a limb on this, but I'd bet a case of Prosecco that your Bro is the type that plays fast & loose on requirements, compliance & legalities. He is a big personality and usually gets his way even if its totally wrong. Your hubs knows his BIL is this and has wanted to get away from anything BIL but has held back as he's your bro and hubs has gritted his teeth to not upset you as you are his bride and his love. In the past, the amounts involved were smallish as were issues with the house but now as MILs NH costing thousands a month and a decade older house, it's a lot of $$$$ & liability looming for you & therefore hubs.
If mom is ruled ineligible for Medicaid, the NH will come after you personally to be paid. And the ineligibility will start day 1 of her NH stay. Avg NH cost is 5K -15k a month, over 100k a year in most areas. Hubs knows this!

Bros wanting to not charge FMV rent to get around Medicaid's % and just getting renters to pay taxes, "upkeep" (& just wth is that) won't work. Medicaid rules and required reporting for rental are pretty specific. There are folks on this site who have done this (Pam) and very knowledgeable about renting and the ramifications for Medicaid and tax issues (AKdaughter) of rentals.

If your bro just won't be all legal, aboveboard in all this, I'd suggest you cut your losses & get an atty to legally remove you from any ownership & liability ASAP with the future clusterF. I'd love to hear your hubs viewpoint btw....
(3)
Report

I've been thinking about your situation. I imagine Medicaids stance comes from the lifetime right to live in the house. They probably figure that if mom was living there she would be the sole occupant and of course the house would be unrentable regarless of ownership. So now - while mom can't live there anymore she still retains that right. And since mom can't live there you are able to rent it - thus them coming to the conclusion that because Medicaid is paying the bill that allows mom to live elsewhere this allows you the ability to rent the house - because of them paying the nursing home - therefore they should get the rent money. Does that make sense and/or sum up their position? I follow this train of reasoning but sure think it's a nasty reach-around on their part. Still, I would consult an attorney and ask for an appeal.
(1)
Report

The best you can do now is consult an Elder Law specialist to remedy the situation as best you can.
(1)
Report

That just doesn't seem right to me - if it's been ten years and your mothers name is not on the deed. I get how'd you would assume 8% but not all the rent. Is there an appeal option? Maybe consult with a elder attorney. Sure seems off to me. I'm sure there are probably dozens of situations like your - where someone else has the house and is renting it. I've heard of houses being sold but the elder person can still live there a while or until death. What would Medicaid do in that case - if the new owner was not related. I can't imagine they'd be able to pull this in that situation. If I were you I would ask for a appeal or review.
(1)
Report

The house was deeded over to me and my brother 10 years ago. However, mom has life tenancy in the house. She could live there till she died, but she went into a nursing home 2 years ago. One year ago my brother and I rented the house to some relatives, and Medicaid now says even though the house supposedly is deeded to me and brother, all of the rental income is my MOTHERS income. All of it. We thought Medicaid would want 8% of the rent due to mom's life tenancy, but no, they want all of it - except for insurance and taxes (I HOPE).

They tell me when the house is sold, we will lose the 8% of the cost because of the life tenancy, and we knew about that.

We weren't looking to get rich off the heap, the renters want to buy it, badly, but it won't be for a couple of years (they're young and have to save up some).

It was a shock to get that Medicaid letter. My husband is furious and thinks we should sell it ASAP 'as is', or my brother should 'buy me out'. Just like that!

Brother says he won't charge them rent after the first year lease is up, he will ask them to just pay insurance, upkeep, and taxes, not monthly rent. (Does that sound kosher??? I don't think so, but that's his plan!) He will not sell the house 'as is', he wants to wait 2 years till the renters scrape up the money to put a down payment on it.

And here I am right in the middle, I don't know anything whatsoever about this kind of stuff. I thought my brother knew what he was doing, he handles all the finances. He's the one who does the taxes, talks with the lawyers. And no one ever mentioned anything about the rent and Medicaid, they knew the circumstances, and went, 'yeah, you're renting the house? cool, here's a lease rental form, here's the tax prep forms.' We had no idea all the rent was considered mom's income.

Everyone is just furious.
(0)
Report

I'm confused. Who's name is on the deed? If it's your name on the deed how was it "transferred" to you? Also, if it's your name on the deed, is it the "life tenancy" that has push this issue so far past the usual five year look back?
(1)
Report

This discussion has been closed for comment. Start a New Discussion.
Related
Questions