He had a fall at home and now can no longer live at home and has to have skilled nursing care indefinitely. His mind is not as sound as it had been before the fall. His home is in his name only. He has no savings and lived on SS. The medical insurance will only pay so much and the rest is up to him or Medicaid. We were told that he cannot get Medicaid until all assets are depleted including his home. Is this true about having to sell the home? Is there a way to keep the house and still have Dad qualify for Medicaid? Can we somehow put the home in a family member’s name?
My understanding is on a home if it’s his primary residence (usually means there’s homestead exemption form done) it is an exempt asset for his lifetime. But can be subject to a estate recovery action (MERP) on the property after death, if it reverts to an asset of his estate.
so take that worry off your plate for now
BUT I’d be more concerned about how to evaluate what’s best for the near future as you know for sure he cannot live at home.
- if he’s still in in NH as a post hospitalization rehab patient, his stay is being paid by Medicare. MediCARE pays like 100% for 20/21 days and then at 80% up to 100 days. 20% copay is usually covered by a secondary insurance. See if dad has one. 20% is a fixed $ amount. I think $170. Imo you really really want to do whatever you can to get dad to do his rehab - paid by Medicare- as long as possible as it buys you time to figure out all the what if’s & wtf on house & $. Speak with PT, OT to see how it’s going & you do whatever cheerleading needed. MediCARE pays like double or triple for services, so everyone happy while Medicare paying. To me each day of MediCARE gives you another day to figure out house & financials. Comprende?
- if he’s already off MediCARE rehab, you imo need to make a house decision ASAP.
-so how is property titled? It’s a trust or life estate? If trust what kind and it is irrevocable? If it’s a LE, that has its own set of issues to deal with. So find his paperwork and see exactly what creature it is.
whatever the case, realize once he applies for LTC Medicaid, all his monthly income (SS) must basically all be paid to NH as required copay. So if house is going to continue to be his, you & your siblings will need to pay all property costs. If dad & you all want to keep it, you can, but again you have to pay all costs and then deal with estate recovery (MERP) after death. House in a trust usually pass outside of probate, so no MERP, although they will send out a questionnaire. LE somewhat differently (remainderman taxes determinations)
Sticky will be having everyone be kumbaya on empty house costs till forever. Like sibling doesn’t pay taxes, other sibs kid stops mowing yard, tree falls on neighbors house, homeowners gets cancelled. DPOA gets over dealing with all as she’s spent 3k on stuff and another sib 2k and nagging. I’ve been on AC for quite a while and usual story is House gets put onto market like 6-8 months after dad goes into NH. Realize whatever it sells for is all dads $. He cannot easily reimburse for costs and as he now has recorded at the courthouse $ as new income / assets. So off Medicaid and onto private pay. If your state can place a predeath lien on the place, Medicaid may need to be repaid to date of sale for costs paid.
it can be rented but that has its own issues as rent is income to dad plus rental stuff tax filing, and if neighbors get peeved abt renters.
You know your family best.... If keeping makes sense & DPOA can keep in detail documentation on every cent go for it. You’ll still have to deal with MERP. But if you go this route, look into exclusions & exemptions to MERP as you may want to file these.
If selling makes sense, selling ASAP is best. Remember getting reimbursed for costs paid likely not possible. Sale has to be FMV (fair market value). If it’s assessor value is whack, imo you kinda need to get it inspected & appraisal so you have legit documentation as to why it’s less than assessment. Medicaid may be difficult regarding property value, so appraisal can be critical. Appraisal is legal document so if it’s 1/3 lower, that’s what it can be sold for (or entered into probate as asset value).
Look at dads ck book to see what costs have been & clearly discuss with family as to costs and stress that the endpoint is unknown. Dad could live another 3 months or 3 years.
The whole Medicaid income copay & MERP requirement comes as a shock to most folks.....
1. Which medical person made the determination he can't live at home? Has he had rehab? What do the therapists have to say? Your profile indicates he's already in AL Is this funded solely by him, or with family help?
I've found that many medical people make the assumption that families have assets to fund placement, and that consideration of other options isn't a factor. This happened after one of my father's ER episodes; before he had even been diagnosed, one of the staff took it upon himself to find a placement (not rehab, but a long term placement) for Dad. He had absolutely no idea of Dad's capability, goals, or our financial situation.
When he told me he was looking for a LTC facility, I asked him if he was going to fund it, b/c we certainly didn't have the funds.
So make sure you're comfortable with the advice and have confidence in the individual who made it.
2. You mention his mind "is not as sound" now and your profile addresses dementia. A fall or other drastic event can also disrupt regular thinking patterns. Your profile addresses dementia as well. Does he need a memory care placement?
3. If his home is titled in his name only, it doesn't sound as though it's been retitled in the name of his living trust. If dementia prevents him from making a legal decision, there's not much if anything that can be done now.
a. Do you have a copy of the Trust? Was there a deed transferring the house to the Trust? Was there a Bill of Sale or other document transferring all his assets to the trust?
b. If he holds sole title to the house, and can make decisions, you might consider discussing with an estate planning or elder law attorney the possibility of retitling (through a quit claim deed) to him, as well as his children, all as joint owners. That would allow them to inherit directly w/o going through Probate.
If there are dementia or family issues though, that's not a good idea. Some family members want more than the others, causing friction with asset disposition.
It's a very good idea to address this now.
4. Others have offered suggestions on Medicaid; they're much more knowledgeable on this than I am, so I'll pass on that issue.
5. Can he afford a supplemental medical plan, such as a Medigap plan? This would expand his coverage, although it won't provide for facility care. I think you need a long term care insurance plan for this. (It's not an area with which I'm very familiar though).
6. Igloo (a poster) is a Medicaid expert; she usually opines in detail on what would be necessary in individual circumstances to get Medicaid. But from what little I know, I don't believe the home has to be sold now; Medicaid would recover later.
7. But if you tried to retitle the home in a family member's name, it might be construed as trying to get Medicaid w/o being subject to the same asset reach of others. And that might apply to joint titling, which is one good reason to discuss the issue with an attorney.
8. What I would do is outline the existing conditions, possible plans, & questions to be resolved, then explore your options. There are a few facts that need to be pinned down before you can start that, specifically, whether your father is able to make decisions and is in sole control of the trust (he'd be called a "Settlor", not "Executor", which applies to wills). The Trust should have identified a successor though.
9. Also confirm with his treating physician what his limitations are, explore the issue of rehab first and returning to his AL second. This can be done while you're researching alternate options. And it could provide the necessary interim adjustment for all if he does need a long term placement.
Good luck; I'm sure this is a challenging situation in which to find yourself, and right now probably all sorts of questions and potentialities.
I see you are getting legal advice. If he has a living trust, if he's competent to sign it into his living trust, that will make it easier for his successor trustee to sell the house. I hope the attorney can answer all your questions.
I would contact Medicaid and ask the questions. I believe that one has to live in their home to qualify, to keep the home, when he dies Medicaid steps in and takes their money back through the house.
If he goes into AL, the home has to be sold and the funds used to pay for his care in AL.