If I put my brother in a home, can Medicaid take the house? - AgingCare.com

If I put my brother in a home, can Medicaid take the house?

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I had my brother sign a quick claim deed to my wife and I.It's two years and I can see that within the next couple of years he'll have to be placed in a home for care.The mortgage is in his name but I have made all the payments.Can the state or VA claim the house or put a lien on it?

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Igloo572 yes the plan is to keep the house- at least my brother plans to continue living in it. We had an affidavit of transfer upon death to both our names through an estate attorney, who also handled all the POA's and other legal documents. We could not do a QCD because my mother's dementia prevents her from making legal decisions. Both parent's wills also name us a co-owners of the house but the affidavit keeps it from probate and is the entirety of their estate. It is also less than $100,000 valuation. Ohio Estate Recovery has two items exempting this from recovery. I have the letter from the doctor(s) in the works as we will need it in the future. Both parents are currently living in the home with my brother and the knowledge that placement into long term care for my mother may be coming sooner rather than later. However, my father is able to get around and remain in the house and doesn't plan for her to be placed just yet. At this time all maintenance costs and taxes are being paid with their monies, as are their medical bills. The house is mortgage free and they are debt free as well, which is a God send, so we count our blessings. My brother provides care from the time the home health aides leave each day until they return the next but is not paid. All purchases are paid with the debit card for repairs and all billing is paid online or by check, with records kept meticulously. At this point I don't think they even qualify for Medicaid because of income above SS from Dad's pension. Dear Dad never bought any type of life insurance and no long term care insurance either. As mom is now 79 with dementia and a heart condition and dad is an 82 year old stroke survivor I don't anticipate them surviving many more years (although anything is possible!). Both of them are declining rapidly in health and neither will go to a doctor in the name of not leaving the other's side. I hope that my brother will be able to keep the house, but we are also prepared to put it on the market should we have to. Since he has been unemployed for 10+ years while taking care of them, he falls under the "undo hardship" clause of recovery as well as being a resident caretaker for over 2 years preventing or delaying their entry into long term care. I will research the part about my having to buy him out, but I believe in OH the law states I can sign off on my inheritance without penalty, and if I do not want to reside there he can buy out my half of the appraised value at the time of the last parent's death. Only time will tell and I only hope we are half as prepared as we think we are!! Thanks for the advice, I am definitely taking actions and investigating all options before time runs out to do so!
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RaBonn - your plan is to keep the house, right? If so, try to find out what documentation will be required to establish the caregiver exemption. Like for TX within the questionnaire sent out with the NOI (notice of intent) if you are filing caregiver exemption, it will require a letter from the now deceased elders physician or social worker on letterhead & with state licensing info as to the caregiving provided. Now whether this is easy to get...... Just depends. Say they live at their home with family caregiver for 3 years. Then enter a NH & apply for Medicaid & live in NH 3 years then die. Getting a letter from their old MD that the now deceased saw 4, 5, 6 years ago may not be easy. Pls try to find out and get this done proactively.

Also if you & bro are both heirs, each of you will need to qualify for an exemption. He has the caregiver one but if you don't, then your 50% of moms estate is subject to recovery based on the value of the estate.

If your states Medicaid allows for the caregiver to get property transferred at the time of the elders Medicaid application, that might be a better plan although gains / taxation will happen.

In theory having the property TOD, Lady Bird Deed, etc means it passes outside of probate, so outside of MERP. But states can change laws. Life estates were considered beyond MERP. But now many states are going after LE for recovery. If states start going after TOD as well...... you want to have a plan.

Also regarding house costs. Try to find out how your state views costs paid on the house in relation to recovery. Often states allow for normal costs (taxes, insurance, basic maintenance) for the elders empty property paid during their lifetime to be a deduction to the overall Medicaid tally sought for recovery. Like for TX there is a specific administrative code on this. But if someone is living in the home, those costs can't be deducted. Instead what you might be able to do is have a promissory note between you & your parent as to how those costs are to be repaid, it's something to clearly discuss with your atty.

For an elder to continue to keep homestead as allowed by Medicaid can be done. But to me, family will kinda need to have the time, wallet and sense of humor to deal with all costs on the property from day 1 of Medicaid till beyond death and through whatever estate recovery may be at that point in the future & plan for contingencies like doing probate if need be. If they live for years & years, could be a tidy sum.
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My mom has been in nursing home since April 2015. I had to talk to an attorney my name was co-owner on my mother trailer but I still had to buy her 1/2 of her trailer out so they wouldn't take it. Also I found out a life insurance policy mom had on me that I had been paying payments on that had cash value on it I had to cash it in. The attorney was able to tell me what to do w money.
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You didn't mention if you and your wife are living in the house and providing care to delay/prevent your brother from being placed into long term care? IF you are, the house may be exempt depending on your state. I did a search for my parent's state's Medicaid Estate Recovery rules and discovered that my brother living with my parents for over 2 years exempts the house from recovery by Medicaid. Our attorney advised us not to do a QCD partially because my mother is no longer competent to sign legal documents, but did an affidavit of transfer upon death to myself and my brother, which keeps it out of probate as well. Definitely consult an elder/estate attorney and document ALL repairs and expenses incurred on the property, keep receipts and bank records as well.
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If Medicaid is being used to pay for a nursing home, Medicaid will place a lien on the house that is owned by the patient, and if the house is empty it must be sold upon death.

Medicaid over-rides anything that is written in a Will because it is a debt that needs to be paid from the estate.
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pamstegma is on point. I have nothing to add.
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What you do long before you go into a home is make arrangements ahead of time to protect the house. If you actually made a will well in advance of going into a nursing home, no one can interfere with that as long as you made that will while you were in your right mind. If you actually cover the house in that will, anyone who interferes with that can get in trouble because that would be dismantling part of someone's legal will after it becomes official and deposited into probate, but the house must actually be specified in those arrangements. Another level of protection is a transfer on death through a lawyer. My bio dad did this but be very wary if it happens to turn out they were influenced while they were not in their right mind, this happens. If your loved one does a transfer on death through a lawyer, make sure he's in his right mind before he does it. A nursing home cannot overturn illegal will or a transfer on death
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I do not know the answer to this but I can tell you one important thing. YOU MUST - FOR A START - BE ABLE TO PROVE THAT YOU PAID THE MORTGAGE. If this would make a difference in this legal issue, I don't know but it is a mandatory starting point before you start getting legal advice. It may make a difference.
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Mary111- I'd be concerned about the validity of the Quit Claim. QCDs seem a simple easy way to "sell" property but whether or not it's valid and the property can actually be legally transferred or sold depends on the status of the property and how the QCD was done & then recorded. QCD are done all the time in divorces even with a mortgage and have a judges orders to do it within divorce decree (I got a property this way in a divorce). QCDs also can work when property is totally owed outright with no liens or judgements against property or owner so there is a totally clear title at the time of QCD & it's recording. QCDs provide no guarantee of ownership, only a Warranty Deed guarantees ownership. Often nowadays when family goes to sell an inherited QCD property, the buyer / mortgage co will require the seller to do a Quiet Title Action at the sellers expense to remove any clouds and establish clear title.

But for your situation, your brother DOES NOT OWN the house! He cannot sell it to you, as there is a mortgage on it. Not until that mortgage is paid off & cancelled and he gets a Release of he Deed of Trust and records it at the courthouse, will it be owned by him. Right now mortgage holder owns the property (via a lien) with loan in your brothers name. Brother cannot just turn his mortgage over to you. His mortgage would need to be cancelled and then your getting a new mortgage. If this is a VA mortgage, you would need to qualify under VA mortgage terms. If mortgage co - again they are the lien holder - finds out about the QCD, I'd bet they can call in the loan. And place balance of mortgage to be done within 30 days or goes into default of the terms of the loan. Carefully read brother loan documents on the house. I'd bet doing anything to change terms of mortgage agreement, like a QCD, triggers default. Mortgage co have very narrow sense of humor and usually limited to spouses to get an simple transfer of mortgaged property either by death or divorce.

Your paying his mortgage benefits brothers credit score and mortgage. Mortgage co doesn't care who pays the mortgage. It could be Santa. Only the actual person listed as mortgage holder gets the credit for payments made.

Financially this is a real mess as there's comingling of assets & debts. And this even before brother gets into the whole all his income required to pay the NH under medicaid & Medicaids transfer penalty & MERP possibility.....
Ideally There would have been some sort of notarized promissory note or memo of agreement between bro & you done already to establish that he owes you & how it's to be repaid.

Really you need to gather up all brothers legal and mortgage documents, along with his awards letters (these get sent Nov & Dec and state what their monthly income will be for the incoming year) from SS, VA and any retirements and see an elder law atty. personally I'd get one who is NAELA and with VA experience if the mortgage is a VA loan.

I'd also suggest you review the costs on the house paid either by you or your brother for the past 2 years, like taxes, insurance, utilities, every penny spent including mortgage to keep house afloat. Then calmly look into your purse to see if it is feasible for you to pay all those costs for possibly years & years.
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My mom passed away in June2016 and her property was transfered to me on her death on a deed not in the will. I got a letter from the state asking about her house and property. It said in the letter that if s he got QMB it was exempt. My mom had a spendown on medicaid so they never paid on my moms bills. She was going to go in a rehad part of a nursing on for a broken hip. She had to go on hospice instead, she was going to come to my house but the Dr said it would cause her more pain so they just kept her there she didnt live much longer. I would suggest talking to a lawer. I called the lawer that done my moms will and deeds but he workes for the state now in the Children Division and he really couldnt be of any help. Most consultantions are usually free. One of my clints ( I worked VNA for 10 yrs) went into a nursing home and her daughter said they could do anything to her house or belonging until she passed or anything they sold was to be giving to the state. Not sure what happened I know the house was tore down and a business was built there. She had a beautiful 2 story house. Good luck. Let us know anything u find out it might help us. My husband has Alzheimers and I going to keep him home as long as I can.
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