Do I need a Living Trust for my Mother's house so if we rent it Medicare or Medicaid cannot take the money? - AgingCare.com

Do I need a Living Trust for my Mother's house so if we rent it Medicare or Medicaid cannot take the money?

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I moved my mother to a full assisted Dementia clinic in Colorado about 5 years ago. She lived in Nebraska and owned a home. I was told at that time I could not sell it as the state would take the sale money. Her care is paid for my Medicare and Medicaid of Colorado. Her house has been sitting empty all this time and is deteriorating and got some damage from a hail storm. The homeowners insurance company said I should get the house put in a trust and rent it after I fix it with the insurance claim money. They said by doing this the income would go into the trust and neither Medicaid or Medicare could touch it. I have full power of attorney. I cover all the expenses of my moms house for insurance and property taxes as she ran out of money so I cannot afford to hire an attorney to take care of this. Does anyone know how the trust works and if I do create one and rent the home would the income remain safe in that trust?

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I am all for what you are trying to do...contact avvo..on the internet..they are a group of lawyers that can answer your questions for free..
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**Get a lawyer**. The following is is not legal advice but a commonsense reading of facts you presented. If you were TOLD that selling the house in Nebraska would result in the state TAKING THE MONEY, there is a Medicaid/state assistance lien somewhere in the system in NE on the property. HI! Igloo, Colorado Medicaid is based solely on income and residency (per my research:) which is why I am sure the OP wants to protect the income in a trust so that mom is not disqualified. Thessler, your mother or you with DPOA can only transfer your parent's basis/interest in the home. If you know mom's interest in home is compromised by a lien (State taking money comment), you can't transfer that "encumbered" aka "impaired" interest to a trust. So #1 no you cannot transfer house into trust, rent the house out and keep the income. #2, the insurance person recommending you do the repairs etc. before collecting and transferring house into trust is really counseling you to perform fraud on both the homeowner's policy (if policy has been vacant for 5 years you violated clause of owner-occupied policy) and the state of NE if they told you this was okeydokey. Not only will participating in this kind of behavior open you to civil liabilities, you run the risk of criminal prosecution. My sister works for an insurance company that specializes in homeowner insurance and unoccupied homes are not insured same as occupied; too many opportunities for damage or fraud. You might slip the claim by, but the risk of being found out? Yeesh. In this case, I don't think you can afford NOT to find some sort of real legal advice to protect yourself. Be careful that you don't cause real big problems down the road.
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I would be very disturbed if there were a way to do what you're asking and have taxpayers pay for mom.
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Geez so many many issues.....and you have gotten really good viewpoints!

First I'm surprised that she is eligible for CO medicaid. Owning a home in another state usually is viewed as a nonexempt asset which makes them ineligible for Medicaid. Have you made it clear in her CO application & renewal that she owns property in Nebraska?

Was she on any medicaid funded program in NE? If so, there could be an existing lien or claim on the property from when she she got those benefits. It's not just limited to LTC /NH benefits. Have you checked the NE co courthouse for paoerwork filed on the propert?

So the insurance co is going to pay out a homeowners claim on a vacant, unoccupied property who's owner lives in another state? Really? If this is a traditional homeowner policy, you have to be in compliance for policy & moving & becoming a resident of another state ain't that. Now a vacant dwelling policy, those will cover limited damage (they are pricey & somewhat difficult to get competive pricing on). If the insurance co does an audit on homeowners polcy payouts,expect to have to return the $ as the policy is not valid.

So just why are you continuing to spend $ away on this property?
If either states place claims or liens against moms estate and you cannot do you own claims on the estate, will it matter if you got zero out of the NE property?
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Do not pay another nickel, you are throwing money away. Once you are on Medicaid, you cannot create a Trust without penalties. Talk to her caseworker if you cannot afford a lawyer.
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All that remains is mom's home in another state. I don't know if Medicaid planning can take place after the fact. Now Medicaid is most likely watching the home to recoup the expenses they have paid for Mom. There may already be leins one it, and possible those leins exceed the value of tge home. Consult with an elder law attorney that specializes in Medicaid Planning.
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thessler, I found my Elder Law attorney through the Aging Care website https://www.agingcare.com/Elder-Law [type in zip code] and she is outstanding.
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I would also check out their websites, not that they're going to reveal anything negative, but you can determine the breadth of their practice. You can also check out the attorneys to determine how long they've been in practice or whether they're just out of law school.

Another option is to find the Nebraska State Bar as well as local county bar associations and check for Estate Planning and/or Elder Law practice areas. There typically are a lot of practice area subgroups with attorneys whose specialties are in those areas.
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thessler, if at all possible, hire an Elder Law Attorney as they are more up-to-date with the ins and out of Medicaid, and other rulings regarding elder law.
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Thank you. Sounds like I'll end up obtaining an attorney in Nebraska. Colorado Medicaid couldn't make us sign anything since the property was in Nebraska and they don't have any state rights or work with each other. We had to make my grandma a resident in Colorado by living with me before we could apply for benefits and move her to a facility.
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