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Mother lives in assisted living center in OR. On Medicaid. But has a house. Can she put proceeds from the sale of the house into a trust (not a living trust) for her children, disbursement upon her death? Will Medicaid still try to take proceeds from children at her death?

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No - when mom applied for Medicaid somewhere within the application is an acknowledgment that estate recovery can be done on any assets mom has upon death. This is called MERP or MERS & how done is very much interdependent on your states laws on death, probate, property rights as well as how any exclusions or exemptions to MERP /MERS can happen. But Medicaid is required to attempt to do a recovery on estates.

Moms house if her homestead, is usually an exempt asset for the rest of her
Iife. Upon death, it becomes a non exempt asset of her estate. What her will reads is important BUT the state will have the ability to have either a claim or a lien on the property due to MERP. How done again depends on your state laws.
Claims or liens will need to be released in order for property to be transferred or sold with clear title. Many states have turned recovery over to outside contractors who are very much approach this as debt collectors and get a % of the recovery & fees.

Are you just starting in the adventure of having a parent on Medicaid? If so, what often comes as a total surprise to family is that the elder is required to do a copay (their SOC - share of cost in Medicaid speak ) of all their monthly incomes less a very small personal needs allowance ($35-$105). They will have no - none - nada - zero - ziltch of their $ to ever again pay on any of the costs on the home. Family will need to pay for all - taxes, insurance, utilities, repairs, etc - on the property from day 1 of NH stay till they die and then thorough the probate process & dealing with MERP. If family is living in the house, they should be paying for its costs & without any after death exemptions. Some states have normal costs of property as an allowable MERP exemption by heirs on vacant property. Heirs can themselves file liens or claims against the estate as part of probate process in this situation. Heirs can buy the house from the estate as well.

Most of the time family cannot afford the costs on the house for the long haul.

But if you have the ability to do this, & like running probabilites, keeping the house is an option. There are a couple of people on this site who have dealt with MERP & kept property - 1 of them the house worth maybe 35k & they spent about 15/ 20k in expenses and state settled for about 5k to provide a release this I'd guess was because the required cost-benefit analysis showed not worth persuing. Another is going to ignore MERPs lein but will pay taxes (the house is vacant, utilities pulled) till the statute of limitations is over & this state has governmental leins subject to limitations ( most apparently don't).

Really do the math on this before you get months or years into this.
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