My mother has been in NH for a year now and will not go back home due to her health. My brother is on disability and has lived in the home for about 14 years. Mother has an equity balance on the house. From what I read about quitclaim deeds, she would still be responsible for the monthly equity payment. Mother is on Medicaid now and has limited funds. Not sure what to do at this point. She really can not afford the equity payments anymore.

Find Care & Housing
Your question indicates there are monthly payments that must be made to a lender every month. When your mother borrowed the money, the loan document probably said the debt would be "accelerated" if she transferred ownership of the house (meaning the whole balance would have to be paid up immediately).

While a Lender probably wouldn't become aware of a transfer if someone kept making the payments, your question, and several of the other answers posted here, point you to consider who is paying for care in the Nursing Home. If it's Medicaid, a transfer of the home will require an update of her eligibility status.

A disabled child could qualify as an exception to the Medicaid transfer rules, but you should talk with an elder law attorney in your state before considering any transfers of ownership, so that the interests of your brother and your mother are protected.

If you procrastinate and take no action to straighten out the home ownership status during your mother lifetime, the equity value of the house may pass into Medicaid's Estate Recovery system upon her death.
Helpful Answer (0)
Reply to John L. Roberts

Beachgrrl, your mother would in fact still be responsible for payments on the equity loan.

As FF writes, this is complex. One of the complexities would be since she is unable to make payments on the HELOC (Home Equity Line of Credit), it may go into foreclosure, and the home would be lost to the bank or company that holds the HELOC.

A quit claim deed would only discharge her interest in the property to someone else. The HELOC will return untouched, and still subject to payment and/or foreclosure.

One issue to be raised with an attorney is whether the brother has any vested rights in the home by virtue of having lived here for 14 years. BTW, is he getting any governmental support, and is your mother getting Medicaid?

Ask an attorney also about the possibility of selling the home and using the funds to pay for your mother's care, or to create a special needs trust for your brother.
Helpful Answer (1)
Reply to GardenArtist

Beachgrrl, this is quite complex. It would be better to talk with an Elder Law Attorney to see what is the best route to take.
Helpful Answer (0)
Reply to freqflyer

Medicaid. Disabled son. MUST SEE A CERTIFIED ELDER CARE ATTORNEY to ensure that this is done right.
Helpful Answer (0)
Reply to jjariz

Subscribe to
Our Newsletter