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Hello everyone,


I have read a bit about this on earlier forums but our case is a little more detailed. I'll get right to it!


I have been living with my lovely fiancé Dagny in the same house for six years now. We have an in-law apartment in the basement and my fiancé's father Ken (76) and aunt Martha (72) live upstairs together. We have been caring for Martha for years as she can't walk well on her own and used to be severely obese. Ken was fully functional and even driving up until over 3 months ago he had a traumatic brain injury which left him extremely lost and confused. My fiancé is a nurse so we decided together to take on the responsibility to take care of Ken once he left rehab. He has taken a turn for the worse recently and is having back problems which are causing him to be immobile. This had made it very hard to get him to the bathroom and bathe, etc... We are very lost and have never thought at our age we would be in this situation. Now we are running into even bigger problems and he is being sued by a credit card company for $26k for a debt he has with them. The house was previously in Ken's name but was put in Martha's name a month or two ago and we still owe over $96k on the house. Dagny and I have been paying the bills and they are all in her name currently. Ken is on Medicaid as of now. What my question is, will Medicaid take our house if he has to go in to assisted living?

Sorry, this post just hits a little too close to home. I am bothered by your phrasing "our home," you do realize that it will never be your home because of MERP, correct.

So long story short. Ex and I had to live with his parents due to care. Social workers lied about MERP. So about $25k into it, I posted on here and Igloo was the only person who got it right. When all was said and done, between back taxes living expenses, mortgages, etc, we were about $190k into it not including lost income, just wasted money. It still sickens me today. Our lawyers (3 opinions) stated we should have stopped making payments, shoved the money in escrow because the mortgage company, MERP and leins could just fight over it. Buying it at a bank auction wasnt even an option because we were primary care givers. It was a lost cause. Money causes alot of problems and fights once your informed.

Your only 30, do you plan on having a family? If you do, you need to plan for the future in a differnt house. Dont make the same mistakes I did.
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igloo572 Jan 11, 2019
Tacy - awwh, I blush!
But yeah if there’s the trifecta of Mortgage, Medicaid and MERP, elders keeping their home does not make sense imho unless there is a younger &/or healthy community spouse in a state where MERP does not file a claim or lien for surviving spouse. For a couple in their 70’s to have basically $100,000 mortgage debt is pretty horrifying - unless there’s an unusual circumstances. Like where I am, New Orleans area, folks do as we have post Katrina disaster recovery rebuilds with mortgages or other lending (SBA, Road Home, MDA) as it’s not yet 20 years post. But 100k Mortgage, a 26k CC debt and the primary breadwinner is 76 is a train wreak just heading for disaster. I guessing there’s other financial issues lurking....... not gonna be pretty.
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It’s not husband and wife. It is siblings which means that no community spouse rules come into play. Transfer of assets is not a protected or exempt one, it’s gifting of an interest without value. Definitely need a lawyer well versed in Medicaid.
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Also regarding the 25k CC debt. It’s considered unsecured debt. Unlike the mortgage which is securitized debt with house as collateral.

If the only source of income for Ken & Martha is SS or a federal pension, civil service annuitant, those income sources are untouchable by creditors with the exception of the “super creditors” like IRS & state tax authorities. VegasLady has oodles of insight on this. For the parents this is important as the CC as an original creditor can file & get a judgement against them but can’t attach any of their income if it’s only SS or federal. The only issue might be IF your state allows for a judgement to be placed onto the property. Some states do not ever allow this (TX, FL), so the judgement exists but of no real use. If judgements can be attached onto property, they are behind the mortgage to ever be repaid so fat chance ever getting $. PLUS for most states the judgement has to be reattached every so often with a fee to do this. So it is in many ways a non starter to ever get CC paid.

But a big issue issue with CC debt is dealing with the constant debt collections calls & letters. They will be relentless and imply all sorts of issues & even threats. Realize that 26k will eventually be sold by the OC (original creditor) to a secondary debt collector and then again to an ever more bottom feeder debt collectors who buys Zombie debt (stuff that’s beyond the statue of limitations for collection). Keeping the elders from Answering the phone or agreeing to things may not be easy if they have dementia or will get scared and agree to a repayment drawn from their bank account. Please please realize neither you nor your girlfriend should pay the bill or do anything that implies either of you take responsibility for her parents debts.
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Lots of interlocking issues.....
Mortgage with 96k balance in Dagnys parents name only, right?
CC with 25k balance is in Dagnys fathers name only, right?
Her folks income is from what? Only SS or federal/state pension?
Any of your or Dagnys paychecks ever deposited into her folks acct?
Bills (utilities, insurance) related to house in whose name(s)?
Ken is on community based Medicaid but Wife is not, right? so who did his Medicaid application and how long ago?

Please reread Tracy’s post regarding mortgage. She’s spot on that change in “ownership” is problematic. You & Dagny have a system for caregiving, so to me you’re kinda ok this month for keeping that band-aid holding up. I’d try to figure out property situation as the priority this month rather than what’s next in caregiving (thats for February) & Medicaid issues. You can only juggle so much....

I’m guessing you’ve not owned a home so unfamiliar how paperwork gets done, my answer is based on this..... Traditional Mortgage agreements have very precise terms as to what has to be fulfilled in order for mortgage to be in compliance & that includes any change in title/ ownership. “alienation clause” Tacy mentioned will be in mortgage. Everything Mortgage would have been filed at courthouse by either mortgage co service provider or Title Co involved within days of the Act of Sale. If you cannot find original mortgage paperwork, don’t fret, the Deed of Trust will be filed as an attachment to the property at the CH. Most CH have all this available as an inexpensive download and the portal usually is by the PPIN # on the property rather than street address. Any tax bill will have the PPIN. So you put in the PPIN # and up pops the history of all legal attached to the property for the last 20+ years. Filings are in short hand, like WD = Warranty Deed #1234 $8.00 download fee, TD = Tax Sale Redemption Deed #5678 $2.00 fee etc. Filings will have the name of Dagnys parents on the ones since they bought it. Personally I’d pay to download all filings since their names got attached to property. There could be filings on it that you all are unaware of. Either you do this and take to the attorney meeting or atty will have their paralegal do it at extra co$t$.

So the name deletion 2 -3 mos ago, how was it done? Im guessing by a QCD / Quit Claim Deed? Issue for QCDs is that they do not guarantee that there’s a clear title to the property. Only a Warranty Deed does that & until mortgage is paid off and a Release of Deed of Trust sent to the owners by mortgage co and filed at CH, will there be a clear title to actually allow for true change in ownership. So if it was a QCD, not only did it not truly change ownership, it also can place the existing mortgage into being out of compliance as within Mortgage you have to notify them of any change in status on owners. If out of compliance, Mortgage co can call in the loan and that morphs into serious issues as usually it’s a 60-90 day “call in” aka mortgage must be paid in full or goes into the foreclosure process. Mortgage co have no humor.

If mortgage is getting paid on time, the mortgage co or it’s service provider probably not aware of QCD filed. So her folks are likely ok. But the QCD will need to get rescinded or some other transfer back as eventually it will surface and be a problem.

What was Reason for removing his name?
If done to get around Medicaid Estate Recovery, that is huge not allowed. Viewed as asset avoidance. Medicaid has within application they must be notified within a tight time frame as to any changes in resources by Medicaid recipients or spouse. If house say has $250k assessor value, by his transferring his 50% share to wife, he’s gifted her $125k. If this was suggested by that “family atty”, they are imho clueless on Medicaid or real estate law & have totally screwed the pooch in more ways than one that an experienced elder law atty will have to clean up. Get property documents and meet with NAELA atty this month.
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If you r considering Medicaid for LTC within the next 5 years, then turning over house to daughter maybe a problem. It may be considered hiding assets. This is something you need a lawyer well versed in Medicaid. Then there is the Aunt to consider.
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I think you need to start looking at thing from a different perspective. Ken's problems are not yours. Its called self preservation.

The first thing you need to research before meeting the attorney is whether or not the alienation clause of the mortgage was broken on the mortgage contract during the transfer. If it was broken, the bank could forclose. Who is on the hook for the 96k? Take the transfer documents and mortgage papers with you.

Secondly, is Medicaid providing any in-home services? Was a social worker sent in to do a needs assessment or is only your DHS department involved? Example, incontenence supplies would be considered in-home services. If a social worker is administering the services, you do realize a monthy "administrative fee" of around 500-600 a month is tacked on to the property lein at death.

I would meet with more than 1 lawyer and not the family lawyer especially if there is a preexisting relationship with the elders. What you have described is similiar to what our family attorney stated, tranferring assets and it put my ex on the hook for a huge amount of IRS debt...took years to fix it. Before you meet with the lawyer check with your county clerk that no other leins are placed on the property.
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Who's name is on the home loan? Is Martha's name only on the title? Was the transfer of the title before or after the Medicaid application? Does Ken have income coming in and what does it pay for? What is Medicaid currently paying for?
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Yes you really need a lawyer. Transferring the title of the house may affect his Medicaid eligibility too. You can’t just sign over assets and then get Medicaid.
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Reply to worriedinCali
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I would talk to a lawyer about Ken filing bankruptcy if someone has POA over him. And I would meet with Elderly lawyer to help with Medicaid and their rules.
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bayerusa Jan 9, 2019
Thank you, that was something we were thinking about as well. I appreciate the advice.
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You really need an attorney to handle all this: the credit card debt, the house, Medicaid, etc. if your fiancé has been paying all the bills and her name is now on the accounts, I have a fear she may bear some responsibility for what is owed. Only an attorney can untangle this and give you the tools for a legal resolution.
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bayerusa Jan 9, 2019
Thanks for your response. This has been a real stressful time. We have a family attorney that has been helping but I’m not sure he is certain how serious things are. Some of the things he says are confusing but he’s assuring us everything will work out.
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