Could we lose our home, because the money made form the sale of my parents home is gone?

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My husband and I and My Father and Mother decided that we would move in together. We put both of our houses up for sale, and whichever one sold first, then the other one would move in, and make the necessary additions, be it bathrooms, bedrooms, whatever, with the money made.............well, all has been fine.......(well, not exactly a bed of roses, but you know what I mean! lol)....we've put in a handicap bathroom for them, and constructed a third bathroom, in our basement, where my husband and I have moved our bedroom, in order to make room for them....they wanted to pay off our house, so that when they were 'gone', that financially, we wouldn't be burdened with a house payment any longer, because neither me nor my husband are in the greatest of now, all of this info brings me to what has Father has ended up in the hospital, which we thought he had done something to his back, but he has an infection on his heart valve, which no one seems to know how that has happened, it has gone to his blood and it's in his brain. The doctors think it has caused him to have another stroke.......he is 'in and out' of consciousness, in that, some days he knows us, and some days he does not...he's pretty much bedfast, and at our care plan meeting today, will require a medical lift, if we choose for him to come home, when they stop his IV antibiotics. We can choose for him to go to a continuous care facility as long as they can 'prove' he's 'improving' from any kind of therapy, but if not, then decisions will have to be made, as of 'what' we're going to Dad worked his job for many years and recieves a decent check, my Mother recieves a check because of him working as well.....the social worker told us today, that we could potentially lose our home, because the sale of their home, and the money made from it, was put towards the pay off of oursand the improvements to make it safe for them???? Even though my parents would be paying for their own stay if they would need to stay at a long term facility.....Does anyone know of any info regarding this??? Our realtor told us, that they could've gone to Las Vegas and gambled all of their money from the sale of their house away, for all anyone knew.....

Answers 1 to 10 of 11
I've never heard of such a line of reasoning regarding the sale of one's own real property. Check with a tax lawyer and an elder lawyer. I find this ridiculous.
How long ago did they do all this.
How is the house titled? Is their name on deed, etc
I would consult with an attorney to get with legal facts for your state and situation. The only time I've heard of the State taking a home was when the person was on medicaid and passed away, the state could claim that person property. But since your father is not on medicaid, your Mother is still living there and hopefully the home is in your name. I don't know what the social worker is hypothesizing about, you could ask her what situation would cause your family to lose their home. I don't like her scare tactics, I would still talk to an attorney you trust or who specializes in elder law. Best Wishes!
Top Answer
Even if your Dad were to apply for Medicaid, and even if the house payment situation was within the Medicaid look-back period, true expenses for care do not count as a "gift" and therefore would not have to be repaid.

I assume you saved the paperwork on the construction and renovation of your home, and that you can show that the improvements were made to be able to accommodate your parents, so they could live in the home with you. Gather all that. Then talk to an attorney who specializes in this.
Something is missing here, either in terms of what was told you, or what you retained and explained here. An attorney will be able you to sort out the true situation in short order, especially if you gather the reno paperwork ahead of time. Good luck!
I think that social worker should stick to what he or she knows. I doubt that includes elder law.

Lose the house to whom? You say that your father would be private pay? And the social worker says some agency will come in and claim your house?

As everyone else has said, check with a specialist who knows the law -- a lawyer!
Frazzled: From what you said, here is my understanding. Your parents sold their home and moved in with you. They gave you money to remodel your home so that they could live in it with you. Then they paid your home off because they wanted to do that for you. Now your father may need long term care. Your parents earn enough money from their incomes to pay for the long term care your dad needs. Your parents do not require any government assistance to help pay for your dad's care in a facility. Is my understanding correct?

If my understanding is correct, then the social worker is completely wrong. I suggest that you have another chat with her, tell her that her comments were upsetting to you and you want to make sure that she understood your families circumstances correctly. Maybe she didn't understand that your parents do not need government assistance.

It never hurts to meet with an attorney that specializes in elder care. It will answer a number of questions you may have now and in the future.

Good luck, Cattails.

What the social worker is probably referring to is "co-mingled funds and asset and income disallowcation" and a "transfer penalty" based on the $ parents got from the sale of their home that they gave/transferred to you. Just what information did the social worker have and looked at to make that kind of statement?

You say your parents would be paying for their own stay. What I have found that is unless the individual has documented banking assets over 6 figures (not property but liquid assets) the long term care facility is expecting that the resident will need to go on Medicaid and that look at the residents resources to see if there is likely to be a problem with the Medicaid application. (It sounds like your dad will need a pretty high level of care, that could run 10 - 12K a month so 100K in savings is vaporized pretty fast.) The transferring of $, sale of house, etc are all red flags for a Medicaid application. No matter how well intentioned your parents were in giving or "gifting" you the $, it will be lots of paperwork to get through. As others have said, you need good legal on this. Find an elder care attorney to go over all this with you - preferably one who has a practice in the same county in which your home is located as there will be many trips to the courthouse.

What "TheFixer" is referring to is MERP - Medicaid Estate Recovery Program.
Every state is required to do MERP in order to participate in Medicaid but how it's run really is unique to each state as it depends on each state's approach to death/estate laws and probate. For example, my mom is in Texas and under TX MERP it is a Class 7 claim against the estate, so other claims are paid first and foremost (class 1 - class 6) before MERP, so it's lower in TX than in other states where MERP is a lien on the estate.

As Jane B said, more details on your situation would be helpful.

Yes, you desperately need to see an elder law attorney. Assemble all the documentation you have (settlement sheets, any transfers, receipts from the remodel, mortgage satisfaction, etc...) and make an appointment now. You are in a complex situation and need someone who knows how to sort it out. It will be money well spent. If in fact you could be required to come up with the money your parents gave you to pay off your mortgage, would you want to have to remortgage your house because you took the advise of a social worker instead of an attorney?? Free advice is often worth what you pay for it!
I agree with igloo. It only becomes an issue if Dad needs Medicaid (if he runs out of funds or his "check" is not enough to cover costs of care). Even then only the amount of money your parents put into house (over and above any amounts paid for "medically necessary" renovations.) would be recoverable if paid within the 5 year Medicaid look-back period.
Since your house seems to be paid off, you could re-fi if necessary to cover this amount (Perhaps with an equity line of credit - with this you would only need to withdraw funds as needed - and still only obligated as above.
Frazz - what the "Realtor" doesn't realize is that IF your folks should ever need to apply for Medicaid, the state Medicaid program requires months of all financial documentation and then can go back for a full 5 years on an asset search if there is something that piques their interest. For my mom's initial application (Texas) I had to submit the current month and the previous 3 months of all bank records and have a letter from each of her financial institutions as to the disposition of ALL accounts closed within the last 3 years as well as insurance policies and other documents...all in all ran about 100 pages.

Property (home, car, boat, etc) ownership information and transfers, transactions are recorded and are just keystrokes away from getting a history. The $ trail may not surface initially but eventually will and you could face a transfer penalty of the $ they gave you. The penalty varies by state, like for Texas it's about $ 145.00 a day as Texas NH reimbursement rate is kinda low.

The only thing I've heard about that is under the radar on assets & income are oil & gas revenues as they are often so small (we're not talking Spindletop here) that they get paid only after the amount meets a certain level (like you don't get a check for $ 1.34 but payment is not done till it reaches $100) or the ownership is so diluted percentage wise and the ownership gets keyed to whomever is the first name on the lease (like Adam Abraham) or they are in an assigned heirs payment system.

Get an attorney to start to sort this all out and before Dad get discharged.

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