Mom has a home worth 250K with a 283K mortgage debt. The house is rented out no need to sell. She must go into skilled nursing at this point so with no equity will Medicaid view the condo as an exempt asset.
I would think that even if the house is worth less than the mortgage that Medicaid will watch the property for a sale. Property values are changing drastically in some areas of the country. Next year the value may increase Medicaid at time of death will try to recover any money that it can to pay the nursing home bill. And if you decide to sell, see an elder lawbattorney that specializes in the politically correct term Medicaid Planning.
gladimhere is right, at least as far as I know. Medicaid will want whatever money they can get from a sale of the home. Timing of the sale would likely be up to them. Carol
rick - you asked another ? on this same property a few days ago regarding exemption on the house.
Their home is an exempt property for Medicaid by & large in most states. But IF they go onto NH Medicaid, they are required to do a co-pay or their "SOC" (share of cost in Medicaid speak) of all their monthly income to the NH less a very small personal needs allowance. The PNA varies by state and runs from $ 35 - 90 a month. Mom will have no - nada - zilch of $ to pay for anything on the house. Mom will not be able to pay the mortgage anymore.
If the property is rented, the rental $ is income and needs to be a part of mom's required co-pay. Rental needs to be all above board too - which can mean local ordinances and tax filings. Now funds can be kept to pay for mortgage, insurance, taxes & maintenance but there will be strict reporting on all this to Medicaid. And the "rent" needs to be at fair market rates. No no renting to grandson for $ 100 a month. If mom's regular monthly income (her SS and retirement income) is already high (like my mom's is $ 1,800 a month which is $ 363.00 below her state's Medicaid allowed maximum of $ 2,163.00 monthly income), then renting at fair market rates (say it's 1K for 3 bedroom house) would take them over the allowed monthly income so they would be disqualified from Medicaid.
Continuing to outlay & deal with a property that is underwater on its mortgage; reportable rental income for taxes & Medicaid; & also subject to the required Medicaid Estate Recovery program, just makes no sense to me. How do you see mom's house to be an advantage?
Keeping & paying for a empty parents home that is owned outright and there are probably exclusions, exemptions or hardships that could be filed to offset the MERP claim or lien can make sense, IF you have the deep enough pockets to pay for everything for however long the elder lives (could be 5 mos or 5 years); AND there is something about the property that make sense to keep it; AND have a probate attorney who knows how to deal with MERP. It's still a gamble with MERP but you at least do have some things going in your favor with documentable exemptions, exclusions and hardships. But an underwater mortgage situation is a whole different creature.
For most, the parents home is sold with the proceeds used to pay off the mortgage &/or use for their spend-down for Medicaid. Your mom's property is so underwater, that you likely will never see a dime back on your time or your costs paid on anything house. Why keep the house?
ric - I'd also like to suggest that you take pencil to paper and get the hard costs on mom's house / condo. Taxes, insurance, utilities, etc. Go through the last 2 years to see what it really costs and especially what the HOA dues are. I'd speak with whomever is the head of the HOA to see if the condo is about to need to do an assessment to cover a capital improvement (like next year is the required 10 year replacement on all water heaters so fees extra next year). Also mom may be required to let the HOA be aware that the state has the ability for a claim or lien on the property by MERP. Condo property rights can be quite different than those for a traditional single family home.
If the house is producing income, Medicaid will leave it alone as long as ALL the income goes to the nursing home. ALL of the income!!! That leaves no funds to pay the mortgage or taxes. Your best bet is to call the bank and arrange for a "short sale". If they agree to it, sell it asap
Carol
Their home is an exempt property for Medicaid by & large in most states. But IF they go onto NH Medicaid, they are required to do a co-pay or their "SOC" (share of cost in Medicaid speak) of all their monthly income to the NH less a very small personal needs allowance. The PNA varies by state and runs from $ 35 - 90 a month. Mom will have no - nada - zilch of $ to pay for anything on the house. Mom will not be able to pay the mortgage anymore.
If the property is rented, the rental $ is income and needs to be a part of mom's required co-pay. Rental needs to be all above board too - which can mean local ordinances and tax filings. Now funds can be kept to pay for mortgage, insurance, taxes & maintenance but there will be strict reporting on all this to Medicaid. And the "rent" needs to be at fair market rates. No no renting to grandson for $ 100 a month. If mom's regular monthly income (her SS and retirement income) is already high (like my mom's is $ 1,800 a month which is $ 363.00 below her state's Medicaid allowed maximum of $ 2,163.00 monthly income), then renting at fair market rates (say it's 1K for 3 bedroom house) would take them over the allowed monthly income so they would be disqualified from Medicaid.
Continuing to outlay & deal with a property that is underwater on its mortgage; reportable rental income for taxes & Medicaid; & also subject to the required Medicaid Estate Recovery program, just makes no sense to me. How do you see mom's house to be an advantage?
Keeping & paying for a empty parents home that is owned outright and there are probably exclusions, exemptions or hardships that could be filed to offset the MERP claim or lien can make sense, IF you have the deep enough pockets to pay for everything for however long the elder lives (could be 5 mos or 5 years); AND there is something about the property that make sense to keep it; AND have a probate attorney who knows how to deal with MERP. It's still a gamble with MERP but you at least do have some things going in your favor with documentable exemptions, exclusions and hardships. But an underwater mortgage situation is a whole different creature.
For most, the parents home is sold with the proceeds used to pay off the mortgage &/or use for their spend-down for Medicaid. Your mom's property is so underwater, that you likely will never see a dime back on your time or your costs paid on anything house. Why keep the house?