Hubby and I moved in with mom a year and a half ago and I am her caregiver. She currently does NOT need skilled care but as her health is getting worse, she might in a year or two. Mom's house is PAID OFF currently.
Here is what we want to do...
Hubby and I want to buy a property about an hour away in a bigger town and bring mom with us, either living in the same house or her own house next to us. The thought was hubby and I would buy the house with a mortgage, get moved, then eventually sell mom's house and use that money to pay off the new mortgage. The only difference now is that mom's name wouldn't be on the new property.
She's essentially moving her paid house to ALL of our paid house. How would that impact Medicaid should she need it in the future?
Next is M’s health and care needs. Do you think she will last 5 years? If her health deteriorates, are you thinking of her moving into AL (private pay so she needs her own money) or staying out of a facility for five years with home care (expensive) until she needs to go to NH (possibly with Medicaid)?
If she “lives in her own house next to us”, who would own that house? Usually she would, and Medicaid would look at that asset. Or were you thinking of taking it in your own names, keeping it in the future and renting it out? Medicaid would look at her providing the money for the purchase as a gift to you if it goes into your own names.
If you and H “buy a house with a mortgage”, you could buy it in joint names with M, or M could provide the mortgage – her name would then be on the title as mortgagee. It would be an asset as far as Medicaid it concerned. You could run it down with rent and caregiving charges, and the 'gift' would be what is owed at the end when it is discharged. That might make a lot of sense.
Chances are that Medicaid gets you on most of your options, and the big money-saving question is whether M will need a NH in less than 5 years. Burnt’s suggestion of a “trust that's a protected asset” undoubtedly has more complications attached to it, but you definitely need a local lawyer for that one!
The first thing to work out is what you and M actually want to do.
Consult an attorney before doing anything. You cannot look at a crystal ball with your mother's future who may require Medicaid if her funds run out in less than the 5-year look back period should she require an AL.
If you sell mom's house and use the proceeds to pay off YOUR house, I believe that would be seen as her "gifting" the money to you. That is a no-no.
You would be better off to buy the new house in her name, with a transfer-on-death deed to you. She is allowed under medicaid qualification rules to keep her full time residence. As well as a vehicle and a limited amount of cash in the bank. They will not force her to sell her house and car if she is using them.
As others have pointed out, Medicaid has a 5 year look back period. So, if you don't expect to need to apply for medicaid for 5 years, then you only have the IRS to worry about by having your mother "gift" you a house. Yes, there's going to be a lot of taxes on that.
Sounds to me like you are selfishly thinking of how you can use your mother's money now to enrich your life, without waiting for her to die or spend all "your" money on her own health care.
I find it funny you spin it in this way: "She's essentially moving her paid house to ALL of our paid house", except that "her name wouldn't be on the new property"!
If you really want to buy a house together with mom, put all three of you on the deed, and you better plan on contributing an equal portion to pay for it. Even if that means you carry a mortgage, and mom's extra money sits in the bank, for HER use. That is actually not a bad idea. She still contributes to the cost of a new home for all of you, maybe in a more desirable community, and she has her family with her to the end.
You know, your mother can pay you as a caregiver. But I would put it in a written contract and make sure employment taxes are paid and income tax is withheld. Cover all your legal bases.
I'm also updating the house as much as I can afford to make it senior friendly doing it all myself. I do all the shopping, cleaning, laundry and food prep. Why? So she doesn't have to spend HER money. So she can keep as much as possible in case she needs to fall back on it.
So yeah, I think you read that wrong. Thanks for your reply.
It seems that some people are blessed to have mothers who are homeowners with their names on house deeds and the assessors forms! That is a great option that you and your hubby had (living with family.)
Hopefully the elder care laws and investment laws are inclusive and equitable in the area where you may move, so that your mother can legally access the new location if only your hubby’s name will be associated with the new property.
Does your mom like the larger city? Will her offspring (you) be acting as the skilled nurse in the future if you are currently a caregiver? Care.com is a great tool to quantify caregiving efforts! I’d love to learn more about your situation!
Your mother uses Medicaid rather than Medicare with her age?
Yes my sorority sister contacts have told me that multiple names on house deeds is quite common in collaborative multi-generational environments!
Would your mom’s son-in-law ever want to add his household members as dependents on his healthcare account?
Happy holidays!
Don't buy a property and have her name on the deed. Let her contribute to it financially if she wants to. Keep her name off the deeds and keep her out of a care facility for five years. That's the Medicaid look-back period. If she transfers assets over to her family now and you keep her out of a care facility for five years, those assets will be Medicaid-exempt and they will pay for her in residential care.
Or she can buy a property with you and put it into Trust with you as the Trustee. This means even if she has to go into a residential care facility, the property is a protected asset for as long as you don't sell it and if she's low-income and meets Medicaid requirements, they will pay.
Medicaid has a 5 year lookback, using her money to pay for your house is gifting.
You need to pay for your house yourself and leave her money to care for her.
Have a consultation with any attorney, IMO that is the best option.
Not necessarily. If the mother buys the property and it's put into Trust that's a protected asset.
Why shouldn't the little guy in the middle class not do what wealthy people have done forever? Rich millionaires and billionaires put everything into Trusts for their families. This is how they save on paying taxes and get things for free.
Why is the small, middle-class person with a little bit of money and maybe a piece of real estate, supposed to set the example of honesty and financial morality?
Please.
See an elder law attorney for options.
Moving in the direction you suggest would make mom self paying only if in need of care and you cannot tell at a second's notice if in facility care is needed.
Do not consider doing what you are suggesting.
This would be "gifting" on your mother's part to such an extent that she would never get help for her care from any governmental program. You may think she won't need it. But think again. She well may need it even WITH all the proceeds from sale of her home.
You badly need the advice of a competent elder law attorney in your area, not the many opinions of a forum, friends or neighbors. It's clear you don't know the drastic circumstances this could lead to that you cannot take back nor do over. Don't do this without seeing an attorney first.
Your Mom really should save the money from the sale of her house to use later for a really nice Assisted Living that also allows Medicaid after one has been self-paid in AL for a certain amount of time.
Time to set up an appointment with an Elder Law Attorney to guide you through this process.