Maybe we should all become impoverished when we start collecting social security retirement by transferring all of our assets to our children at that time, wait about six years and then apply for medicaid. Then all the baby boomer elderly won't have to worry about MERP and the Federal and state governments will have to find another way to finance a much bloated Medicaid debt! I would not be surprised if a new law were enacted calling for a lifetime look back.
Itsa - putting a home in a trust or a life estate and then applying for Medicaid (so that the actions are close in date) tends to be viewed as a Medicaid avoidance and will either outright decline Medicaid acceptance at worst or trigger a transfer penalty inquiry which keeps them from being eligible for any payments by Medicaid till the penalty is worked out. All real property transfers (land home autos) are recorded on the local level by the tax assessor and then dovetail into the state database. The transfer of ownership - whether by a quit claim, warranty deed, life estate, etc - will surface and the elder will face a transfer penalty on the action.
The trust because it doesn't go through probate, does avoid MERP. MERP is designed to be done through probate. But if they don't qualify for Medicaid to being with while they are alive, then that doesn't matter now, does it? Also there seems to be a newer issue with homes of those who go on Medicaid for NH, (even if the home is in a trust) in that the title companies are now requiring some sort of indemnity done for property sold by the elderly due to the whole issue of a MERP claim or lien clouding the title.
Kathleen - isn't FL with a Lady Bird Deed? Then it's like you said & it falls outside of probate to get it transferred to your name. Is it coastal or within a coastal area? - if so look to see where it is on the new NFIP maps - the new rates for flood are going to be very expensive & will make the wind pool rates seem cheap.
Nancy7 - a Miller Trust doesn't have to do with property ownership, Miller has to do with with excess income & Medicaid eligibility. A Miller Trust is a way for the Medicaid applicant's qualified income to divert to the trust so that the applicant has a monthly income under your state's income limit for Medicaid. You - as the surviving spouse who is not on Medicaid & living in the home - are exempt from any Medicaid recovery / claim / lien on the house. If there is a surviving spouse still @ the house, no recovery.
Please get an appointment with your nearest Area Agency on Aging for a legal consult--they are free. Make a list of "yes or no" type questions [then prepare for the lawyer to take each of those into more complicated discussion] questions.
There are numerous factors that could change outcomes for your property. ==What State you are in. ==Whether you owned your home "free and clear as a single person before you got married to this spouse. ==Certain legalities regarding surviving spouse keeping the house. ==Certain legalities of the immediate family being allowed to keep the house, particularly if it is also their home, and taking it would cause them to become dependent on the Welfare system… ==If there is a disabled child/adult child in the home being cared for by the surviving spouse, such that forcing them to lose the home would cause greater dependence on welfare, or, that the cared-for person would be caused to become more ill if forced to move, causing greater care-costs. ==Many States allow the surviving spouse to remain in the home, but once that surviving spouse dies, the kids don't get the house---it gets sold to pay off the State. ==Are the kids are paying monthly to the owner of the house, as in making the mortgage payment? --Then they they could file a lien on the property for the amount they have paid, which would take precedence over the State, since it was filed first, before State filed a lien. All liens must be satisfied once the property gets sold--those who filed firsts, generally get paid first; though unsure if that applies to State debts. ==IF the house is under a Reverse Mortgage, that entity owns it [main lien-holder], --there'd not likely be anything the kids could afford to buy back--evidently, even the State takes back-seat to Banks/Lenders in getting anything off a lien. ==Have you placed the house/property into a Living Trust that you own? In which case all your assets are owned by your Revocable Living Trust…A lawyer would need to answer how well that would protect your assets from your spouses debts, or from his State-level debts from getting Medicaid. BUT, a Living Trust does not necessarily protect your assets from your needs for Medicaid--you might have to spend it all down to get Medicaid for you.
Lots to consider.
Some States, like CA, IF "...person owns their home free and clear as a single person, BEFORE they marry", that property is NOT part of "joint property" for purposes of debts the non-owner spouse causes, nor in divorce or inheritance issues. ==Whether that applies to State debt accrued by a non-owner spouse, is a question. There can be loopholes either way--consult a lawyer!
Welfare laws are fairly similar from State to State---like a 5-yr. look-back, etc. for assets. States may differ when it comes to allowing a surviving spouse to keep their home. CA & WA, Welfare allows about $40,000 total assets for a couple, but only $2000 of assets for the sole survivor of a couple, in order to qualify for DSHS help. And, States administer the Federal program that assists Medicare recipients to get the Federal subsidy to pay for their Medicare monthly premium--States use same criteria to screen who gets that assistance, as for other Welfare recipients.
Some States "take" assets to repay the State for help given via Medicaid--that can be done in various ways. In some areas, that includes billing relatives. BUT… Welfare will likelyback-off, IF [spousal or immediate family impoverishment]--- the family can show just cause why DSHS should cease & desist billing family--or taking family assets [both personal and business] --it must be substantiated that if DSHS takes assets, the family would end up as DSHS recipients---most any State would do what they can to prevent more people being reduced to being welfare recipients.
Some families, the owner puts their assets into an LLC [limited liability corporation]. That removes those assets from "personal ownership"; they remain in control of the primary person; family must run it like a corporation--there has to be at least one annual meeting, and family members become "board of directors" and other various rules apply [record keeping, etc., as laid out in whatever rules are placed in how the LLC is structured]. This arrangement lasts until the "president" of the corporation dies, at which time the assets are divided among the Board of Directors….Not entirely sure how this needs set up, but know people who have done this successfully. This USUALLY protects those assets from the vagaries of individual financial issues, and Usually is used by those who have large enough amount of assets to make it worth it…BUT…it still may not be safe against the State or Feds --Gotta ask a lawyer!
No simple one answer, without knowing a raft of particulars. You need to talk with a lawyer.
Don't get talked into deeding the house to your son before you die. You might find yourself in trouble with Medicaid if you need to go into a NH. Also, you might find yourself homeless. If it's in his name, it can be foreclosed for his debts or he or his heirs (god forbid something happens to him) can sell it out from under you.
An elder lawyer with Medicaid experience in your state is your best get.
Since your name only is on the deed, you should not have any problems should you lose your husband. Have you looked into a Millers Trust. Check with your atty. as I am sure he will be familiar with this trust. I had a Millers Trust when my husband passed away and he was receiving Medicaid. There was no problem with our home. After all, I had to have a place to live and the Millers Trust that guaranteed this.
I agree Igloo and others..Medicaid is a very complicated process. My Caregiving group that meets once a month had an Elder Attorney come and speak...and wow...it's is mind blogging...there's a whole set of rules for what's considered exempt and not exempt from including as assets. The home, in TN, is not exempt if both spouses have passed and there is money owned to the State for NH care. Of course, it's understood that the recoup method is a lien and if and when the house is sold, the State is probably first in line to get reimbursed from the sell. You almost have to have an Elder Attorney to help navigate the process. So it would probably cost a couple thousand to get someone approved for Medicare but probably worth the expense.
Igloo so what you are saying is they are more aggressive about collecting after death? I am trying to set myself up so that if they come after dad's condo upon his death I have the money to purchase it myself from MERP as a last ditch option. It is much cheaper than the overly large house I have for just me now that family has grown & gone. 2300 sq ft is actually too much now while I am caregiving & advocating at the home. I really do not wish to age & go in fac. here either as the condo is in Florida there is or at least has been better advocacy in FL. So if I move to FL into his condo after death I will be fac. there. The diff. in FL now is that it has moved towards an Obama situation where the NH have changed how the person is advocated for. Don't know if it will be worse or better for the patient. All I know is FL NH are better & have more funding than TX. I can't stand the NH system & advocacy here. It all trickles down to bad care. I already have a ladybird deed on the condo which in both states means that it avoids probate which means in TX they don't come after it but just in case they try I should have the money to purchase the $40,000 condo from them once we close on this vacant lot we are selling. Out of my half if it sells like its supposed to I will have the 40,000 and more to cover maint. fees. Then I can leave this monster of a house behind for someone 60 something to maintain & go to that nice little 2-2 condo with all neighbors over 55. Such a nice quiet community too. It was restful over the summer there. I will miss the kids though. I will have to find a place to stay when coming back for a visit to see them. Maybe that's where the rest of the sale proceeds will go is towards a hotel when I visit the kids back here. I know I won't get them to come see me. Maybe they'll send the grandkids so they can go to the beach with me.
Kathleen - another thing to keep in mind is IF your state has outsourced MERP. TX has done this as has dz.'s of other states. For those states who have, the approach to MERP is very different as the contractor does this on a % of recovery. So they are very much like debt collectors rather than state employees. For TX as about a dz more states it is HMS who does this. They are very very good at what they do as they (different division) do compliance for CMS.
Although the correct type of lawyer would be a good idea you may be able to find out the correct answer in your locale before or instead of paying for the lawyer. The lawyer very well may be unnecessary expense. In other words if in your state MERP will not do anything about the house you will have paid a lawyer or firm for no good reason. Most of the time you will end up paying whether you need to or not & something may be done that you wish you hadn't. I would start with the web regarding your particular state. Then I would try & contact your local area on aging or your DADS office which in Texas stands for Dept. of Aging & Disabled. Start by typing into google search field (Dallas, Texas nursing home ombudsman) for instance using your town & state. Get the correct phone number for that town's ombudsman. Then call that number & ask if they have someone over benefits & financial eligibility in their dept. that you could speak with. If it's like DFW you will go to a voice mail that will be replied to in a month at the shortest so I would also ask if there is an email address for the person so you don't have to play phone tag. Sometimes they don't know it or can't give it but it's worth a shot. Just ask for anyone that knows anything about financial eligibility for nursing home medicaid. Then when you get to the right person explain & they should know the right answer for your area about the house. Your other contact options are the state you live in, you can try & find the numbers for your state's HQ for these agencies. I really do wish people couldn't post on here w/o including their state because then ppl like myself could give you more concrete helpful answers. What state do you live in?
MrsMagoo - the state does NOT want your mom's or anyone else's house. The states are not in the "little old ladies house" real estate business. BUT what the states are required to do - in order to participate in Medicaid - is to try to use the assets from the Medicaid recipient to pay or recover ("recoup") some of the costs paid on their care and paid for by Medicaid. This is done via MERP after death and via the 5 year look back when they apply. Medicaid is for those "at-need" so they have to qualify for needing "skilled nursing services" and financially "at need" which is basically impoverished with 2K in income & 2 K in non-exempt assets. The home if it is their primary homestead is an exempt asset except in unusual situations. If a spouse living in the house, it is always exempt. Now under MERP, there are exemptions to recovery and expenses allowed to off-set recovery. What they are and how they have to be applied for is different for each state and very much dependent on state death laws. But the key to the exemptions and expenses is that they HAVE TO BE FILED FOR TO MERP and within the very short specific time-frame that MERP requires.
If you don't, then the state can place a lein or a claim on the property. So any sale or transfer of the house will have to have the MERP claim or lien "lifted" before a sale or proper transfer can be done. State doesn't want the house but state wants proceed$$'s from the sale or value of the home to recoup Medicaid payments.
The states have been able to do some sort of recovery since the 1990's. BUT rarely was there anything definitive done till recently. In the early 2000's, the fed's required the states that in order for them (fed) to do the Medicaid matching, they (state's) would have to come up with a recovery plan. As each states Medicaid program is administered by each state differently, how MERP is done depends on your state laws for probate, death & property rights. The states grandfathered all existing Medicaid recipients too so if you were on Medicaid before 2005 or 2006 (depends on state) then there would be NO MERP done as the rules had changed.
Kashi - this last sentence is important for your family to know and look into.
It's a lot to wade through and really it's my thought that most of us need an elder law attorney to make this happen correctly. Long term planning is the key but most family & their elderly just don't. It is my experience that if they live long enough, & unless are generationally wealthy, they will run out of $$ & need Medicaid.
kashi - the ability to "transfer" a house without Medicaid finding out doesn't happen very often. All real property ownership is recorded in the state's database and is just a few keystrokes for the Medicaid caseworker to find out to the penny what stuff sold for.( I don't know if all states are doing this but we had to do a separate TIN paperwork for property we bought a couple of years ago.) So all that data is there, state will find out, therefore Medicaid will find out and a transfer penalty done on the Medicaid recipient. Now how that get's enforced is a whole other issue….
just a thought have you made a will? if you pass first then the asset goes to the other spouse if married if other spouse goes then it is yours but please put in will what you would like done with the property they can only have one spouses half not yours
You should protect yourself legally by having a contract indicating services to be provided and the agreed upon compensation, as I've been told, to avoid any accusations or charges for misusing/stealing/embezzling your parents' assets.
Thanks 'gladimhere".....I've always pondered this dilemma. I do believe that child caregivers should be compensated in some form or fashion for caring for their parents. If I end up having to care for one or both of my parents, I would probably keep their SS income toward that care. It's just the house I guess is the main issue that is left 'out there". In my State, TN, I don't think the house is exempt and after the last parent has passed (after being in NH using Medicaid) the estate must pay back the funds used. It's just that if the parents' own a $500,000 home and transfers it to a child and then the parent(s) must use medicaid for NH care..that's the part I think is unfair to leave taxpayers to pay for the care and the children get to keep the proceeds from the home.
It depends on the state you live in. I suggest you meet with an elder law attorney in your area. As an elder law attorney in Florida, I can tell you the home is an exempt asset in Florida, and as long as you live there or your husband has an intent to return home (whether he can is not relevant), the home will descend to your son. I strongly encourage you to meet with an elder law attorney. Brittany G. Gloersen, Esq.
Kashi- Ask yourself what your parents would want. All assets going for care of some of those going to children? Also keep in mind that we as well as our parents have paid into the system as well to pay for Medicaid. My grandma paid for her own care in a nursing home, she lived to be 101. All of her assets went for her care. But eventually she ran out of money and was on Medicaid for the last six years of her life. She would rather that the assets were reserved for her children. But, because a family member was not willing to care for her she was required to spend her money for her care. Care is care and should be paid for regardless of who provides it. Raising a child is much different than caring for a sick parent, who will never get better and often comes at great sacrifice by the child caregiver.
A significant difference in some of these cases is that children take the responsibility of caring for parents, sometimes in parents home. Give up own homes, life, career, family and everything else. This is why, in some states, Medicaid allows property to be transferred to a child if child has cared for parent, keeping them out of institutions for at least two years, but they have done it for much longer in some cases. If these child caregivers are not compensated for care by parents, which in many states is permitted by law, we are creating yet another generation of eligible Medicaid recipients in those child caregivers, who have given so much, when costs are higher.
I always have trouble with this issue....if Medicaid is used to pay for nursing home care (isn't that our tax money?) and if there are any assets (house) left, shouldn't that be used to reimburse for the care? But then you have people changing the deeds to put their children on ...so they can keep it or sell it and keep the proceeds after their parents passing.. I feel that is cheating. But maybe I'm missing something and maybe I should talk to my parents about changing the deed to my name. I do have an aunt who has been in State care for the past 30 years or so. The family farm is in her name and will be sold after she passes. Those funds will be used to pay the State back for her care.
In IL. Medicaid paid for my friend's nursing home care. The surviving spouse has now passed. The children (all over 60) have listed the farm for sale. Medicaid will be paid back from the proceeds. I do agree with this, since the family did actually have the money to care for their mother, it was just tied up in the farm. (I am talking about the lady's actual farm.)
Whatever you do, I advise against putting your house in multiple names. My parents put the deed in our seven names, The dissension over one sibling's financial abuses committed years ago, but only brought to light in recent years since I became POA and fiduciary, will make it very difficult to come to agreement on much of anything.
A good estate planning attorney should be consulted, if possible, especially with so much at risk. I wish my parents had put the house in a trust 20 years ago, but the good news is that they didn't because the financial abuser would likely have connived their way into administering the trust.
First & foremost, do you live in a community property state? I believe that alters the situation a bit - if the house is in just your name in California, for example, your husband would still be considered 50% owner if the home was purchased during the marriage, regardless of the fact that he is not on the deed. As suggested before, you should consult with someone who knows the laws of your state.
The trust because it doesn't go through probate, does avoid MERP. MERP is designed to be done through probate. But if they don't qualify for Medicaid to being with while they are alive, then that doesn't matter now, does it? Also there seems to be a newer issue with homes of those who go on Medicaid for NH, (even if the home is in a trust) in that the title companies are now requiring some sort of indemnity done for property sold by the elderly due to the whole issue of a MERP claim or lien clouding the title.
Nancy7 - a Miller Trust doesn't have to do with property ownership, Miller has to do with with excess income & Medicaid eligibility. A Miller Trust is a way for the Medicaid applicant's qualified income to divert to the trust so that the applicant has a monthly income under your state's income limit for Medicaid. You - as the surviving spouse who is not on Medicaid & living in the home - are exempt from any Medicaid recovery / claim / lien on the house. If there is a surviving spouse still @ the house, no recovery.
Make a list of "yes or no" type questions [then prepare for the lawyer to take each of those into more complicated discussion] questions.
There are numerous factors that could change outcomes for your property.
==What State you are in.
==Whether you owned your home "free and clear as a single person before you got married to this spouse.
==Certain legalities regarding surviving spouse keeping the house.
==Certain legalities of the immediate family being allowed to keep the house, particularly if it is also their home, and taking it would cause them to become dependent on the Welfare system…
==If there is a disabled child/adult child in the home being cared for by the surviving spouse, such that forcing them to lose the home would cause greater dependence on welfare, or, that the cared-for person would be caused to become more ill if forced to move, causing greater care-costs.
==Many States allow the surviving spouse to remain in the home, but once that surviving spouse dies, the kids don't get the house---it gets sold to pay off the State.
==Are the kids are paying monthly to the owner of the house, as in making the mortgage payment? --Then they they could file a lien on the property for the amount they have paid, which would take precedence over the State, since it was filed first, before State filed a lien. All liens must be satisfied once the property gets sold--those who filed firsts, generally get paid first; though unsure if that applies to State debts.
==IF the house is under a Reverse Mortgage, that entity owns it [main lien-holder], --there'd not likely be anything the kids could afford to buy back--evidently, even the State takes back-seat to Banks/Lenders in getting anything off a lien.
==Have you placed the house/property into a Living Trust that you own?
In which case all your assets are owned by your Revocable Living Trust…A lawyer would need to answer how well that would protect your assets from your spouses debts, or from his State-level debts from getting Medicaid.
BUT, a Living Trust does not necessarily protect your assets from your needs for Medicaid--you might have to spend it all down to get Medicaid for you.
Lots to consider.
Some States, like CA, IF "...person owns their home free and clear as a single person, BEFORE they marry", that property is NOT part of "joint property" for purposes of debts the non-owner spouse causes, nor in divorce or inheritance issues. ==Whether that applies to State debt accrued by a non-owner spouse, is a question.
There can be loopholes either way--consult a lawyer!
Welfare laws are fairly similar from State to State---like a 5-yr. look-back, etc. for assets.
States may differ when it comes to allowing a surviving spouse to keep their home.
CA & WA, Welfare allows about $40,000 total assets for a couple, but only $2000 of assets for the sole survivor of a couple, in order to qualify for DSHS help.
And, States administer the Federal program that assists Medicare recipients to get the Federal subsidy to pay for their Medicare monthly premium--States use same criteria to screen who gets that assistance, as for other Welfare recipients.
Some States "take" assets to repay the State for help given via Medicaid--that can be done in various ways.
In some areas, that includes billing relatives.
BUT…
Welfare will likelyback-off, IF [spousal or immediate family impoverishment]--- the family can show just cause why DSHS should cease & desist billing family--or taking family assets [both personal and business]
--it must be substantiated that if DSHS takes assets, the family would end up as DSHS recipients---most any State would do what they can to prevent more people being reduced to being welfare recipients.
Some families, the owner puts their assets into an LLC [limited liability corporation]. That removes those assets from "personal ownership"; they remain in control of the primary person; family must run it like a corporation--there has to be at least one annual meeting, and family members become "board of directors" and other various rules apply [record keeping, etc., as laid out in whatever rules are placed in how the LLC is structured].
This arrangement lasts until the "president" of the corporation dies, at which time the assets are divided among the Board of Directors….Not entirely sure how this needs set up, but know people who have done this successfully.
This USUALLY protects those assets from the vagaries of individual financial issues, and Usually is used by those who have large enough amount of assets to make it worth it…BUT…it still may not be safe against the State or Feds
--Gotta ask a lawyer!
No simple one answer, without knowing a raft of particulars.
You need to talk with a lawyer.
An elder lawyer with Medicaid experience in your state is your best get.
but if the children were caretakers of the surviving spouse
doesn't that change things?
The states are not in the "little old ladies house" real estate business. BUT what the states are required to do - in order to participate in Medicaid - is to try to use the assets from the Medicaid recipient to pay or recover ("recoup") some of the costs paid on their care and paid for by Medicaid. This is done via MERP after death and via the 5 year look back when they apply. Medicaid is for those "at-need" so they have to qualify for needing "skilled nursing services" and financially "at need" which is basically impoverished with 2K in income & 2 K in non-exempt assets. The home if it is their primary homestead is an exempt asset except in unusual situations. If a spouse living in the house, it is always exempt. Now under MERP, there are exemptions to recovery and expenses allowed to off-set recovery. What they are and how they have to be applied for is different for each state and very much dependent on state death laws. But the key to the exemptions and expenses is that they HAVE TO BE FILED FOR TO MERP and within the very short specific time-frame that MERP requires.
If you don't, then the state can place a lein or a claim on the property. So any sale or transfer of the house will have to have the MERP claim or lien "lifted" before a sale or proper transfer can be done. State doesn't want the house but state wants proceed$$'s from the sale or value of the home to recoup Medicaid payments.
The states have been able to do some sort of recovery since the 1990's. BUT rarely was there anything definitive done till recently. In the early 2000's, the fed's required the states that in order for them (fed) to do the Medicaid matching, they (state's) would have to come up with a recovery plan. As each states Medicaid program is administered by each state differently, how MERP is done depends on your state laws for probate, death & property rights. The states grandfathered all existing Medicaid recipients too so if you were on Medicaid before 2005 or 2006 (depends on state) then there would be NO MERP done as the rules had changed.
Kashi - this last sentence is important for your family to know and look into.
It's a lot to wade through and really it's my thought that most of us need an elder law attorney to make this happen correctly. Long term planning is the key but most family & their elderly just don't. It is my experience that if they live long enough, & unless are generationally wealthy, they will run out of $$ & need Medicaid.
kashi - the ability to "transfer" a house without Medicaid finding out doesn't happen very often. All real property ownership is recorded in the state's database and is just a few keystrokes for the Medicaid caseworker to find out to the penny what stuff sold for.( I don't know if all states are doing this but we had to do a separate TIN paperwork for property we bought a couple of years ago.) So all that data is there, state will find out, therefore Medicaid will find out and a transfer penalty done on the Medicaid recipient. Now how that get's enforced is a whole other issue….
Brittany G. Gloersen, Esq.
Ask yourself what your parents would want. All assets going for care of some of those going to children? Also keep in mind that we as well as our parents have paid into the system as well to pay for Medicaid. My grandma paid for her own care in a nursing home, she lived to be 101. All of her assets went for her care. But eventually she ran out of money and was on Medicaid for the last six years of her life. She would rather that the assets were reserved for her children. But, because a family member was not willing to care for her she was required to spend her money for her care. Care is care and should be paid for regardless of who provides it. Raising a child is much different than caring for a sick parent, who will never get better and often comes at great sacrifice by the child caregiver.
A significant difference in some of these cases is that children take the responsibility of caring for parents, sometimes in parents home. Give up own homes, life, career, family and everything else. This is why, in some states, Medicaid allows property to be transferred to a child if child has cared for parent, keeping them out of institutions for at least two years, but they have done it for much longer in some cases. If these child caregivers are not compensated for care by parents, which in many states is permitted by law, we are creating yet another generation of eligible Medicaid recipients in those child caregivers, who have given so much, when costs are higher.
A good estate planning attorney should be consulted, if possible, especially with so much at risk. I wish my parents had put the house in a trust 20 years ago, but the good news is that they didn't because the financial abuser would likely have connived their way into administering the trust.