Can a home with a mortgage be transferred to a Medicaid compliant trust in Massachusetts?
Mom wants to transfer her home to a Medicaid compliant trust. It still has a mortgage. Can she transfer it without an issue or does she have to payoff her mortgage prior to transferring the home? Thanks
This is a question for mortgage company and lawyer since that sort of trust transfers ownership and the trust is not the one paying mortgage in this case usually
I never heard of transferring a home to a Medicaid trust. If you have monthly income that exceeds the income cap, depending on the State, you can put the overage into a Qualifying Income/Miller trust. A house is a non-exempt asset while Medicaid recipient is alive. Once they have passed it becomes an asset that Medicaid can recover monies they used to care for the recipient. No transfer of money or property should be done if it looks like the person will need Medicaid within 5 yrs of the transfer. Gifting is also not allowed.
He said/she said a medicaid COMPLIANT trust. I think they mean the one that they have to make an irrevocable trust. And it has to be done 5 years before there is any need for Medicaid. The very sad thing about these trusts, which protect assets for the kids, is that it saves the home for the children, but it forces the elder into Medicaid nursing homes, and removes any control over their own assets from the elder the moment it is signed. It gives away your assets to your children while you live and breath and may want to USE your assets. I loathe these trusts, and really don't answer them anymore. Let the kids go to an attorney where greed will face greed.
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Good luck.
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