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My mother and I live in Alabama. I've lived with her in the house she owns (My name is not on the deed.) and been her caregiver for 6 years, and the house is willed to me upon her death. However, she is thinking of entering a nursing home because her condition is beyond what I am able to take care of alone and hired aides so far are not up to the task. If she does go into a nursing home, she has a little money that would be gone through first, then Medicaid could take the home. Can I live here until I die or otherwise move, or will I have to vacate immediately? I am disabled and receive a small Social Security check. Without this house, I would be homeless. I know spouses can stay in the home until they die or otherwise leave it. Can I do the same considering how long I've lived here? Thank you for any help you can offer.

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Good point on the inherted house vs. changing the deed. I never though about those particular tax implications.
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LivingSouth, I would also ask the same question that Babalou had asked... I am surprised an Attorney would recommend deeding the house to you, there is no way of knowing when one's parents might need Medicaid. If your parents need Medicaid and it has been less then 5 years since the house was deeded to you, then Medicaid could deduct the net worth equity of that house from any Medicaid funds... thus your parents would have major out of pocket expenses.

For you, down the road when it comes time to sell the house which was change to your name, when it comes to paying capital gains the basis will be the date that your parents had bought the house. Thus if the house is worth $500k today and your parents paid $50k many decades ago, there will be a capital gains of $200,000 after the $250k allowed deduction when you sell. Now if you inherit the house, the net worth of the house will be the day you receive said house $500,000 and the basis would also be $500,000.

As for the house remaining in the family if you are a caregiver for two years, you would needed to be at a high level care type of caregiving [24 hour care]... thus your parents would be in a physical and/or memory condition that would have warranted being in a nursing home.
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LS, was this attorney familiar with Medicaid law?
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I just consulted with an attorney about this since I am in the same situation. She is going to transfer the house to my name, so that parents can get Medicaid in the future. If you are disabled and living there, or a caregiver, they cannot take the house. Attorney also said that the house could be sold at a later date if a smaller property, or apartment, was desired.
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Thank you all so much for the wonderful support and information. I'm less scared about being put out of my home, and I have a plan of action - starting with seeing an elder law attorney.
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I looked up a bit of Medicaid law and you can keep a home and a car. The Lady Bird deed also known as an Enhanced Life Estate Deed would be your best bet. There are a lot of income and asset limits so you might want to go on Alabama.gov and look up Qualifing for Medicaid. This is usually a very hard process and lawyers know ways around the law so your best bet is to find an Elder Law Attorney in your area. To find one go to naela.org (National Academy of Elder Law Attorneys) to see who is certified in Elder Law. Don't do anything without the advise of an attorney or you could lose eligibility for months or years.
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Is she aware enough to set up a Trust or otherwise Deed it over to you, although that could cause it to be in the 5 year look back period. Not sure, each state is different. Would that cause you problems with other family members after she is gone?
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Find out if you have been living in the house I believe more than 2 years and are taking care of her, they might not take the house. It is possible that if the house gets sold down the road, they might want some money from the sale to pay for her care. Find an Elder Care Attorney and ask, don't wait too long. If you gave up your residence to care for her it is possible, depending upon the state, that you might not have to leave. Also check and see if your State, like New York, allows you to refuse to pay for her care. I can't remember what it's called.
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I live in Tennessee, we had a lawyer draw up papers deeding the house to me. It was almost like dad sold me the house over a two year period but no money changed hands it was wrote up that way. It had to be done five years before he needed a nursing home or died since my mom was already in the nursing home. We succeeded and it had been five years six months when he needed a nursing home so that keeps Medicaid from getting the house. I can't sell the house as long as mom and dad are alive though.
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Frustrated2's answer is the only answer so that it is done according to your state's law. In Pa there is the "Estate Recovery Act" also, and that is exactly what i'm just beginning to enter into. Of course, when it came time to take the checkbook, - my Moms, that is exactly when i hired an Elder Law attorney. 302'd; declared incompetent by orphans court, etc. Powers granted. Dementia. An attorney. Then your safe! good luck to you
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I remember reading somewhere that an adult child can remain in the home if the child is blind or otherwise disabled. Maybe your state medicaid agency can provide you with any info on this for your state?
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Look up "Lady Bird" deed as it applies to your state, then contact an attorney.
My mother added my brother and I to her deed via the Lady Bird deed several years ago and it is protected from liquidation for Medicaid and/or Probate. Upon moms passing, my brother and I will decide what becomes of her home as we will both own it. Till then she can enjoy her homestead knowing that her children will become the next owners.
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After reading the answers, buying the house for less than fair market is a definite no-no when it comes to Medicaid. So buying the house for a piddling amount of money will be seen the same as your mother giving assets away. It should not be done. It would probably just irritate Medicaid workers when they saw.
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Elder law attorney - you need to talk to one! You say you are in AL, Nolen and Stewart in Bhm are good. Bill Nolen helped with my MIL and my mother's affairs. There is Medicaid "pay down" as mentioned previously. Plus, as mentioned previously about getting the house deeded to you to protect it from Medicaid, it has to be in your name for 5 yrs. or it is still subject to being considered as your mother's property in a Medicaid audit for NH payments.
Blessings to you!
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It also depends on the state's rules but in NY IF they put a lien on the house if the caregiving child or heir has undue hardship they may forego it. In NY there is a 5 yr. look back on transfer of property or money. If you have to, wait the 5 years and get home health care under Medicaid as the person mentioned above. But again, state's laws vary.
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In my family, my my mom's will/trust states that her children are pretty much to get equal portions of whatever is left in the end. The will/trust was made back when she was still of sound mind, before she developed Alzheimer's. Now that mom has Alzheimer's, how can she be of "sound mind" enough in order to have her home deeded to a live-in caregiver daughter, who has lived with mom and cared for her for many years? Is it possible at this late date to deed the house to the caregiver daughter, and if so, wouldn't the daughter's other siblings be able to contest the will/trust after mom dies?
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Paula, Stressed, Jenn - I'd be careful with any transfer of assets and have very good legal counsel that is certified in elder law in your state to advise you.

If the house is gifted or transferred at less than market value and sometime in the next 5 years, mom needs to go into a NH and cannot afford private pay, then when she applies for Medicaid, there can be a “transfer penalty” imposed by the state on paying for her care. Each state’s penalty % is different as its dependent on the state’s NH reimbursement rate. For Texas it’s $ 148 a day as TX rate is low. Say the state is 5K a mo NH average and house value was 100K, then it’s 20 mos that you will have to private pay. If you’re doing it 2012, then until 2017, the transfer penalty applies. Property ownership is all recorded and Medicaid will eventually find out. What I have seen happen is that, the transfer does not come up in the initial Medicaid review, which most often in 3 -6 mos of financials. So mom gets into the NH and all seems kum-ba-ya. Then months later (when the assessor filings get dovetailed with the overall state system) the property transfer surfaces and you or whomever signed mom in as financially responsible get the penalty letter. You face having to clear the penalty within 30 - 60 days or figure out how mom will be private paid in the NH or move her out. This is a total panic situation to be in. Dealing with transfer penalty means getting a good attorney.Pay now or pay later but you need good solid experience legal who knows your states law.
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Allow your mother to sell the house to you for $10.00 and " other valuable consideration". Acquire a new warranty deed with your name only on it. Go to the courthouse to be sure this is done properly..
Medicaid cannot sieze your home. Your mother will have no assets at this point. Pls check with elder care attorney for details and right of passage..
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Stressedmom, I was typing while igloo572. Please read that answer carefully!
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Stressedmom, please be sure you have good legal counsel before changing ownership of the house. If it is considered a gift, there will be a penalty when Mom applies for Medicaid. There are circumstances under which the house can be transfered to a relative who has done the caregiving, but otherwise it will cause trouble for the Medicaid application process. You cannot give assets away in order to qualify for the need-based Medicaid program.

Definitely do your own research, but consult an elder law attorney before taking such a big step as transferring home ownership.
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Comma - neither the state, the nursing home, hospital, etc want "momma's house", what they want is whatever proceeds or $$ from a possible sale of the house. The key is "possible sale". This is going to be a bit long. My mom is in NH and still has her home (empty) in TX and I will have to deal with MERP in the future:

What you would be dealing with is MERP - a federally required aspect of Medicaid. MERP is Medicaid Estate Recovery (or Recoup) Program (or Policy). MERP, as is all things Medicaid, is administered by each state as Medicaid is joint federal & state program. Because each state does this differently yet somehow the same, each states law on property rights, death law, how probate is done makes a huge butt difference in how MERP is run. So what flies in TX might not in AL. When an individual goes onto Medicaid for NH, they agree to MERP, whether or not they sign off a document on MERP.

MERP is federally required to have several different exemptions for the properly homesteaded property. Most states have MERP such that exemptions can be done only if the property is maintained as a homestead. If your state does a homestead exemption, then your mom (or you for your mom) needs to file for the homestead even if she is living in a NH. For my mom, we do an annual letter in which she states her desire to return to her home when she gets better. This was my mom's attorney's suggestion.

In most states IF the person living at the house was the caregiver for a full 2 years prior to the property owner's going into a NH, then the caregiver can get an exemption from MERP. You may have to prove that you were a caregiver -so if you had a full time job, you might not get the exemption as how could you have done both. Another exemption could be for family living at the home but who were not caregivers but if they were forced to leave the home would be out on the dole and qualify for other state supported housing - this type of exemption will have a formula based on your income and tax filings. But you have to file the exemption within a very specific time frame with MERP to get the exemption. Exemptions are not automatic. MERP seems to be very papertrail oriented so you should start keeping documents now for the eventual MERP filing after mom dies.

Another exemption is for any and all expenses that family or interested party spent to maintain the empty but still homesteaded property of the Medicaid for NH recipient. WHomever spent the $ on the empty house (insurance, repairs, utilities, lawn care, taxes, etc) can let MERP know within the specific time frame, that they will seek reinbursement from the estate for any & all expenses on the home. This amount gets deducted from the MERP tally. I & another family member pay for all for my mom's empty house and will file a claim against her estate in probate. If we were living at the house, we could not claim these exemptions.

My mom is in TX and TX MERP info is all on line although there is some grey area on the submission dates. In TX, which is a claim probate state, MERP is a class 7 claim so is behind classes 1 - 6, so MERP is somewhat lower than other states.
Other states, which are lein states, the MERP lein can be on equal footing with all other liens on the estate so MERP is usually higher in those states. So your states spin on law makes again a huge butt difference in how MERP is done. For example, in Mississippi recent MERP challenges have successfully have it so that the first 75K of a homesteaded property is exempt from MERP but you still have to file for an MERP exemption and maintained the house w/homestead exemption with the county assessor. Also if there is no will, then mom would have died "intestate" & some states law is such that property owned becomes property of the state until lineal heirs are established via the courts or other legal. Messy!

Some states have MERP done by state employees while other states have this contracted out. The states who have outsourced MERP have a higher rate of MERP done as their pay is related to getting $$ from the estate.... in other words the outsourced contractor is really a debt collector. This can be a real nightmare to deal with as it often is with debt collectors. If you want more insight on this Google Randy Drewett. His website is filled with all kinds of MERP & HMS (the contractor for TX & other states) & elder law info that is easily readable. Randy's based in TX. Now I bet there is a Randy Drewett type in Alabama. No I don't know him and my mom's attorney is in a whole other part of the state.

imho you & mom should go to see an elder care attorney before she enters the NH. At this point, if NH admission is looming large, I'd just leave the house however it is owned legally and plan on filing the MERP exemptions after mom passes. Remember you will need to pay for all the the house as all of mom's $ must be paid to the NH less whatever is her states personal needs monthly allowance (for Texas it's $ 60 a mo, which is basically hair salon for my mom!)
If you don't have the following done, IMHO you should have the following done:
- Durable Power of Attorney (not just POA)
- Medical Power of Attorney
- Living Will &/or Advance Directives (DNR) - NH may require this for admission
- Declaration of Guardian in Event of Incapacity
- HIPAA Waiver (umbrella/general one)
- Will or a Codicil to update an old will

The Declaration of Guardian is one that most don't have - this is really important to be done as it sets whom mom wants in her current & cognitive state to be her guardian(s). Once they get a dementia that can change on a whim due to their changing mental abilities.

I'm a firm believer in having an elder care attorney take care of all this. It will not be expensive as most is done by the paralegals. You do want to go in prepared with the information for the documents (e.g. the residence located at 123 ABC street, aka parcel #5678; Ann Smith, wife of John Smith, with the info on all the births, deaths & prior marriages) as well as valid ID for the elder. If the decisions have been already made, this should all simple, straightforward paperwork. Should take 1 - 2 hrs for intake & then 1 hr a couple of days later for the signatures to be done.

If mom has assets, then all this should be paid from her assets. This is important if you ever get challenged on who is DPOA or end of life issues. If you pay for all, and you benefit, then other family could go to court to find it a coerced document.

By letting MERP know you have & will file for an exemption, MERP can evaluate whether or not it is even worth doing a recoup on your mom's estate. For a property with a low value & a claim it might not be really cost effective for MERP to spend the time. In TX the MERP recoup % is low compared with other states, but I think that is mainly due to MERP being a class 7 claim and unless the house is worth a significant amount of $$$, the value of the home will be used up from the Class 1 & 2 claims so not much $ left for Class 7 claims.Just my opinion.

MERP -Medicaid estate recovery gets to the heart of the issue of who should pay for long-term care -- the public through the tax-supported Medicaid program, &/or users of long-term care through their personal resources, including those remaining after death. Amounts collected from Medicaid recipients' estates are not insignificant in absolute terms. They do, however, pale next to total Medicaid spending for long-term care. And it's only going to increase, given that Medicaid is available only to those with very limited resources and the state of US economy.
In a way, the fact that so many people are poverty level will decrease the amount of MERP because many heirs will be able to do hardship exemptions.

At my mom's NH wing, there are 9 ladies in their 90's & all of them have 1940-1950's era homes & all have decades of delayed home maintenance to some degree. All but 2 sit empty. I don't think any of them can sell for the assessor value. MERP wasn’t well thought out. If states get super aggressive on it, then family will let momma's & gran's house go to rot as there will be no benefit for them to spend $ to maintain. Even if you want the house or live in the house, it is to your advantage to let it decline in value so you can get a low appraisal to enter in probate. If family walk away from homes because of MERP, just what are states going to do with a ton of old homes with old people stuff in them that likely has a decade ++ of delayed maintenance? MERP came about 2000-2002 when housing was all a go-go. Totally different real estate conditions now & for the near future.
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I have just gone through this with my mom and went to an elder law attorney to get it done right. There is a rule/law if you have been a caregiver for your parent for at least two years, which prevented them from entering a nursing home, there is a way to put the house in your name. Mom's attorney did a life estate deed for us. I have the deed to the house with my name on it. Mom is in a nursing home now and has enough money to pay for her care for several years. If medicaid allows them to own a home, then it won't matter to us. I have taken over all the expenses related to the house, we shared them prior to her being admitted to the nursing home. I plan on continuing to live in the house for a very long time. We spent several sessions with the attorney to get this done. I would only go to an elder law attorney, they know their stuff and it changes all the time. I have two siblings who are attorneys and they didn't prepare us for any of this, that isn't their specialty.
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In the end, the simple advice is to get a lawyer. As mentioned, an estate or elder care law attorney. I noticed a comment about 'spending down' which you have to been very careful about. It is traceable when a person does that and that just goes on the tab too. Every state is different and every person's financial situation is different. These are huge decisions that can't be made based on what someone else has experienced because there are just too many nuances to list here.
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You have to be careful how you handle this, because Medicaid rules can vary from state to state. Most applicable to your situation is the federal exception that the primary residence (if valued less than $500K) is protected from recovery if a relative caregiver has been living there at least two years, and being there kept the person from having to go into a nursing home. States handle properties in different ways and it is important to know how each state does it. The house may be put in a life estate, with the state holding a lien. If the house is sold or the caregiver moves out, the state can recover money owed. However, the state can evaluate the value of the caregiving service provided and let the caregiver keep that portion of the money.If the caregiving service is worth more than the house, then the state does not seek to recover any money.

Other states may not choose to do any recovery from a house that is occupied by a caregiver who the house is willed to. Check with an attorney and see how your state handles it. Alabama will not be interested in making you homeless, so I'm sure there will be exceptions in place.

I would be careful about having your mother deed the house to you without first consulting an attorney. This could be considered a gift that would disqualify her for Medicaid coverage, so you have to make sure it is acceptable to do this in Alabama before changing the deed.
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I agree with Paula. Your mom needs to put the house in trust or transfer the deed to you.
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YES.....medicaid will take your mom's house!!!! IT'S called "Estate Recovery Act"!!! Unless the owner of the home DEEDS it to you or someone else in the family, BEFORE their passing, the government WILL take it to pay expences they paid to you while you were getting MEDICAID. PLEASE LOOK IT UP! We to have a home that is our moms, and have to get it deeded over so it isn't confiscated by the government! As thy say "You don't get something for nothing" especially when it comes to "Our Government"! I was doing my own research on the same question when I came across this information and I was shocked that they "could or would" do such a thing considering the circummstances, I still am! Get it deeded into your name as soon as possible?! Good Luck and Hugs............ God Bless......
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Don't be afraid to contact Medicare/Medicaid directly, they can be very helpful with information.
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Contact an Elder Care Attorney and put the house in a Trust for your benefit.
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If your mother has Medicaid and is at a nursing home level care, then she is eligible for home care funded by Medicaid and does not have to go to a nursing home. According to your states own website "Medicaid covers home care services for Medicaid-eligible persons of any age who meet the admission criteria, based on a reasonable expectation that a patient’s medical, nursing, and social needs can be met in the home.

Home care recipients must be unable to leave home under normal circumstances, be unable to function without the aid of supportive devices, require special transportation assistance and have an illness, injury or disability that prevents the recipient from going to a doctor’s office, clinic or other outpatient setting for required treatment"
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Good answers -it would be a good idea when she enters the nursing home for you to start looking for somewhere else to live because sooner or later you will have to move-ask the elder lawyer you see about this-I would think the lawyer can be paid with her money-it is better to know what is comming up in the future for you so you have a chance to prepare.
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