Also on LE %, this is not imo simple to figure out. You might can use the IRS tax tables to get a rough estimate on distribution but imo you have to, like have to have a tax attorney to do the paperwork, as specific legal language for LE, eg mom is life tenant & y’all are remainderman. Especially if plan is for LTC Medicaid to be applied for as Medicaid is going to want the property sold for FMV & if not some sort of documentation as to why not. Again real estate attorney work.
Say FL LE house sells for $ 300k which is its current tax assessor/ collector value (so it’s sold at FMV). The issue will likely be that a cursory search by caseworker will show property sold for 300k in Florida and GA Medicaid will expect all that 300 large $$$ to be moms asset so she’s not ever likely to ever get Medicaid eligible as flat just too too much $$$. But moms really really old, like ancient, and her actuarial table % has her at $ 45K. So you & your sibling get $127,500.00 ea and mom gets $45,000. Unless it’s specifically written otherwise into the LE, the $127,500 is yours. You do NOT have to give it to mom. Neither does your sibling. Medicaid could be a real stickler in wanting legal with a bow on it to establish whose assets are whose and why and done by an attorney. I’d try to find one who is both FL and GA bar licensed. And a Realtor with a group in both states as well. Please pls pls don’t try to FSBO / DIY all this.
Also there’s capital gain stuff & taxes involved for all 3 of you. Really another reason why you need a tax attorney.
Fwiw, we bought a LE property (land as house destroyed by Katrina) from a 80ish mom & 3 kids. Mom moved in with 1 son. This son & the mom fully expected the other 2 to give the mom their % remainderman $ so mom would have $ to build a new house. Mom too old to get SBA or a mortgage & was beyond underinsured so no real insurance $. They refused to give mom a penny of thier remainderman $. It was to the point that Act of Sale delayed until a separate document done acknowledging that $ was not required to be paid to mom. Bet their Christmas’ are warm & loving, lol.
Twin, issue imo will be that Florida home will be nonexempt asset. So moms not eligible for Medicaid. Not that it’s a Life Estate but a bigger issue of nonexempt.
Is this the situation… mom has fully owned (no mortgage) property in Florida BUT mom lives in Georgia (where you live). Correct? Mom will be going into a facility either in GA or VA, right? I’m guessing that a sibling lives in VA & they too are on the LE w/you. Mom will be filing 4 Medicaid. Correct?
Hang w me on this….If so, Life Estate in FL is not her primary residence or homestead as mom lives in GA. If mom has drivers license, tax filings, SS info, banking etc all GA address, she’s a GA resident. Not FL. Will b an issue for GA Medicaid imo.
Medicaid is federal & state program BUT administered uniquely by each state & States require that an applicant be a resident of their state and bases whether an asset is exempt or nonexempt according to their states regulations. They r allowed to have a home & a car as exempt assets for LTC Medicaid. BUT needs to be their legal primary residence. Problem is imo FL property will be viewed as a nonexempt asset AND for individual LTC Medicaid maximum nonexempt is 2K. Mom has too many a$$et$; she’s not impoverished due to the home in FL. To be eligible she needs to become impoverished & that happens by her selling her share of the LE as a spend down. LE are sticky as mom doesn’t own it 100%, it will be based on actuarial tables at date of sale. Atty who did the LE or a tax atty will need to do % of distribution / share on LE ownership. It’s imo not a DIY. States have some flexibility, might be ok for “Medicaid Pending” for a while (6 mo my guess) if FL home has Realtor contract & MLS listing. No FSBO
GA LTC Medicaid will require 5 yrs of documentation including financials & details with documentation on all assets in her name. LE will have to be disclosed. Medicaid application is signed w/penalties for perjury & some sort of time sensitive notification on inadvertent omission. It will surface eventually. If mom paid property taxes it’s going to be in her cancelled checks, ditto for paying insurance or repairs or utilities.
Also GA uses a nationwide outside contractor for MERP / estate recovery. They have ability to do extensive research on Medicaid recipient assets.
I’d also be concerned that if mom is getting resident of FL benefits, like homestead exemption, or decreased taxes as elderly FL resident, or has FL wind pool or NFIP flood insurance…. all of these require legal resident AND once any find out she’s in GA, dropped or seriously increased costs. NFIP will not place flood on non-homestead & neither will state wind pools. I mention these as I’m in New Orleans & many have weekend or 2nds on MS coast & over to Gulfshores/ Fairhope. On taxes & insurances, prior to Katrina everyone could easily get flood & wind & HO whether or not it was your primary. Filed homestead for LA & other state. Not anymore. Medicaid & tax assessors know to look for this. I bet as lots of folks have a 2nd place in FL, that GA does the same.
FL home is gonna surface in one way or another eventually.
This is a question for the lawyer who wrote the Life Estate up. We had a man named George who was going thru the same thing. He found that in 2008 his Mom had the deed transferred to him, her name taken off, but a life estate where she was able to live there until she passed. The house reverted to him when she died. So when she needed Medicaid earlier this year, the house was not hers to list as an asset. I would say this would be the same for you but only the lawyer who wrote the paperwork up can answer your question if you are the actual owners.
The only problem you may have is if the house was turned over to you within the Medicaid 5 yr look back period. So if you can keep Mom out of a NH, with Medicaid paying, for the next 4 years, you maybe OK. I think its 5 yrs, 1 day after the date the house was turned over.
Say FL LE house sells for $ 300k which is its current tax assessor/ collector value (so it’s sold at FMV). The issue will likely be that a cursory search by caseworker will show property sold for 300k in Florida and GA Medicaid will expect all that 300 large $$$ to be moms asset so she’s not ever likely to ever get Medicaid eligible as flat just too too much $$$. But moms really really old, like ancient, and her actuarial table % has her at $ 45K. So you & your sibling get $127,500.00 ea and mom gets $45,000. Unless it’s specifically written otherwise into the LE, the $127,500 is yours. You do NOT have to give it to mom. Neither does your sibling. Medicaid could be a real stickler in wanting legal with a bow on it to establish whose assets are whose and why and done by an attorney. I’d try to find one who is both FL and GA bar licensed. And a Realtor with a group in both states as well. Please pls pls don’t try to FSBO / DIY all this.
Also there’s capital gain stuff & taxes involved for all 3 of you. Really another reason why you need a tax attorney.
Fwiw, we bought a LE property (land as house destroyed by Katrina) from a 80ish mom & 3 kids. Mom moved in with 1 son. This son & the mom fully expected the other 2 to give the mom their % remainderman $ so mom would have $ to build a new house. Mom too old to get SBA or a mortgage & was beyond underinsured so no real insurance $. They refused to give mom a penny of thier remainderman $. It was to the point that Act of Sale delayed until a separate document done acknowledging that $ was not required to be paid to mom. Bet their Christmas’ are warm & loving, lol.
Is this the situation… mom has fully owned (no mortgage) property in Florida BUT mom lives in Georgia (where you live). Correct?
Mom will be going into a facility either in GA or VA, right? I’m guessing that a sibling lives in VA & they too are on the LE w/you. Mom will be filing 4 Medicaid. Correct?
Hang w me on this….If so, Life Estate in FL is not her primary residence or homestead as mom lives in GA. If mom has drivers license, tax filings, SS info, banking etc all GA address, she’s a GA resident. Not FL. Will b an issue for GA Medicaid imo.
Medicaid is federal & state program BUT administered uniquely by each state & States require that an applicant be a resident of their state and bases whether an asset is exempt or nonexempt according to their states regulations. They r allowed to have a home & a car as exempt assets for LTC Medicaid.
BUT
needs to be their legal primary residence.
Problem is imo FL property will be viewed as a nonexempt asset
AND
for individual LTC Medicaid maximum nonexempt is 2K. Mom has too many a$$et$; she’s not impoverished due to the home in FL. To be eligible she needs to become impoverished & that happens by her selling her share of the LE as a spend down.
LE are sticky as mom doesn’t own it 100%, it will be based on actuarial tables at date of sale. Atty who did the LE or a tax atty will need to do % of distribution / share on LE ownership. It’s imo not a DIY. States have some flexibility, might be ok for “Medicaid Pending” for a while (6 mo my guess) if FL home has Realtor contract & MLS listing. No FSBO
GA LTC Medicaid will require 5 yrs of documentation including financials & details with documentation on all assets in her name. LE will have to be disclosed. Medicaid application is signed w/penalties for perjury & some sort of time sensitive notification on inadvertent omission. It will surface eventually. If mom paid property taxes it’s going to be in her cancelled checks, ditto for paying insurance or repairs or utilities.
Also GA uses a nationwide outside contractor for MERP / estate recovery. They have ability to do extensive research on Medicaid recipient assets.
I’d also be concerned that if mom is getting resident of FL benefits, like homestead exemption, or decreased taxes as elderly FL resident, or has FL wind pool or NFIP flood insurance…. all of these require legal resident AND once any find out she’s in GA, dropped or seriously increased costs. NFIP will not place flood on non-homestead & neither will state wind pools. I mention these as I’m in New Orleans & many have weekend or 2nds on MS coast & over to Gulfshores/ Fairhope. On taxes & insurances, prior to Katrina everyone could easily get flood & wind & HO whether or not it was your primary. Filed homestead for LA & other state. Not anymore. Medicaid & tax assessors know to look for this. I bet as lots of folks have a 2nd place in FL, that GA does the same.
FL home is gonna surface in one way or another eventually.
The only problem you may have is if the house was turned over to you within the Medicaid 5 yr look back period. So if you can keep Mom out of a NH, with Medicaid paying, for the next 4 years, you maybe OK. I think its 5 yrs, 1 day after the date the house was turned over.