89 y/o father still lives in his owned home independently and wishes to die there. What r legal pitfalls if family buys it before he passes?

Get an appraisal on the house, pay fair market value, use the money for Dad’s care. Document everything.

But first talk to an attorney that is familiar with the laws and rules in your state regarding Medicaid.

We did this with my Mom. My son bought the house (we had it appraised) and he let her continue living in the house, she used the money from the sell to pay her in-home caregivers, along with rent to him (must be fair market rental value). We had approval from an elder care attorney. We also drew up a rental agreement & had it signed by witnesses knowing that Medicaid will be in the picture.

If he registers and is approved, the 5 year rule will apply, so if the home is sold within that 5 year time frame, the proceeds must be kept in his name and only used for him. In addition, if the proceeds for him are over $2,025 he will be opted out of Medicaid, and will have to repay what Medicaid has paid for his care, being allowed to keep X# of dollars (varies by state). He then must be independent pay if he is in AL. He can reapply later if his monthly income is less than $2,000 a month (varies by state, here in Fl for 2019 it is 3K). Each state has different guidelines, although this is a federal program, it is run by each individual state. Even if he continues to live in his house, and is under Medicaid the same rules will apply.

Caregiver, sadly, many elders want to remain in their house until the zero hour. They don't quite understand how difficult and very expensive this can be especially when they need 24 hours care. I see your Dad has Alzheimer's/Dementia and other age related health issues.

My Dad had around the clock caregivers [3 shifts per day] when living on his own as he was a major fall risk and paying $20k per month, but he decided it was waaaay cheaper for him to move to Independent Living facility which was $5k per month.... then later into Assisted Living/Memory care at $7k per month.

My Dad was so glad to get rid of his house, because at 94 he was just too tired to maintain the house, even when hiring tradesmen. What is next, needing a new roof? What if the appliances reach their expiration date? Oops, another plumbing leak? He was happy to no longer pay real estate tax... homeowners insurance.... saved money on groceries as the facility offered meals in their dining room.... no more worry about lawn care, or shoveling snow in winter.

There are elders your Dad's age who remember way back when their grandparents needed to go into a "home". Usually what was available was the county asylum which was a horrible place. Our elders don't know that there are Independent Living and Assisted living which are more like living in a hotel. I know my Dad was pleasantly surprised when he first visited such a place.... he right away asked "where to I sign up?", he was ready to move :)

Therapeutic fibs can work sometimes. "If you don't arrange this through an Eldercare attorney, the State will tak all of your money and become your guardian".

You should see an attorney that can help him retain his equity in the house. This will help you know where to go from here. If he has to sell the house to pay off his spouse, what is his plan?

If you are going to buy the house and you think that he will need Medicaid during the look back period it is important that you pay fair market value for the house.

Get comps from a realtor and keep them in a file to prove that the house was purchased at FMV.

The most important thing you should do to protect dad is document, document, document.

Just read responses, so some redundancy. One thing that you should consult about with the attorney is a qualified income trust aka Miller trust, that is what will be required if his income exceeds the Medicaid limit, but he doesn't have enough money to pay for care. This would come into play when he has exhausted his assets.