Bnnk54- regarding MERP & heirs / beneficiaries, just what position the state has will be very interdependent on what your state has regarding property laws, probate laws and state administrative codes related to medicaid. MERP may not be first or even happen.
Some states do not allow for unsecured liens to be placed on property. Like a Mortgage co as a secured creditor can place a lien but medicaid is not a secured creditor so cannot.
MERP may not necessarily be ahead of heirs. Heirs may have exemptions and exclusions to recovery which can be filed and reduce or eliminate recovery. It totally falls on family or heirs to determine this, then file and with documentation. Each heir has to do their own. So if house is 100k and 3 heirs, and 1 was caregiver exemption, 1 low income exemption, then recovery is only on the 33k that the 3rd heir with no exemptions owes to get release. Family then works it out internally to pay off the 33k and own the house. MERP bill could be 200k but it s limited to whatever the value is of the estates assets. Heirs not responsible for amount over estate asset value at time of death or as filed in probate and signed off by judge.
If the elder has been on NH medicaid then someone has been paying on all the costs on the empty house since day 1 of NH stay. Those costs can probably under states administrative code be exclusions to the Medicaid tally but family need to document every penny and submit to state or it's outside contractor. Family can do an agreement or promissory note with elder as to those costs to be secured debt which could become a lien or probate claim.
MERP could find its outside of cost-effectiveness for recovery. Federal guidelines- I believe- are assets over 3k or a recoverable estate over 10k. Low value property with exemptions or exclusions by heirs and probate opened could be under.
Also if probate opened, then however probate runs for assets of & claims against the estate is the system to which all must follow. For example, for TX probate its a level of claim by class and MERP is a class 7 class; class 1 - 6 which includes executor costs, funeral & burial and other secured claims are ahead of a class 7 claim in being settled; credit cards are class 8. Very different Recovery from a state where all claims are equal.
Some states seem to not persue recovery if property is below a certain value..... like for MS it seems to be only done for property over 65k assessor value.
Family & heirs have to be proactive to deal with MERP. If they do nothing, do not respond to merp's NOI (notice of intent), file no exemptions or exclusions; do not track & documents costs; or open probate, etc. then the state or it's outside contractor for MERP then assume a claim or lein can be filed and it is cost effective to do so and it will happen. Dealing with MERP can be done but will not be simple and will have costs of both $ & time and runs a risk of not being able to do the follow through needed as your elder could live another 6 mos or 6 years.... and the heirs situation can change as well over time.
Bnnk...that was a good price for a Nursing home for your FIL. Here in NW Arkansas it's between - 5000.00-6000.00/mo depending on the nursing home ratings so 10 weeks would have run him around 11,000.00 give or take. Home health for 2 shifts a day plus meals would have cost your FIL that at home and family would have had to cover the 3rd shift plus deal with any medical issues. Home care is simply not the answer in cases where the senior is unable to do much for themselves and NH's are not as they are in Buffalo NY...14,000/mo is more then ridiculous Pam. In this case, everyone would save $$$$ by hiring someone to cover 3 shifts per day at 100.00/shift, if they had the money. This would be when in-home health care around the clock would make sense.
Georgie...first off, in your instance they have to be lucky enough to find someone trustworthy, clean and willing (and capable) of doing the care giving for 55.00/shift (not likely in many parts of the country as Jeannie says)... 1540 a month x 2 shifts a day still = 3080 or 3 shifts in come cases - 4620.00. Why do this when dad can have 24/7 care, including a nurse on duty, at an assisted living facility for the same price? It just doesn't add up...it will cost more and medical care not included...
Might be worth checking into if you live in an area where nursing homes are over 7000.00/mo but in those areas you'll still be hard pressed find anyone trustworthy, willing, dependable and capable willing to work 12 hours a day for less then 100.00. Then there's the fact that you then become the employer and so have to deal with employee taxes and such....you can't expect your senior to take care of the paperwork. No, you must not have had to deal with what my brother and sis in law went through. All is good now, and dad is in a safe place. With all that he has against him medically, we couldn't be happier, even if might means he will have nothing left to pass along to us kids.
Georgie, there may well be people in this country who desperately need a job and would be happy to have a place to sleep, free food and rent free. They might be happy to get $55 a day = $1540 a month "spending money". But these people are not distributed evenly throughout the US. They are not available to all who need help in their homes. And in many cases there would be language barriers. That may be a solution for some people in some areas, but it still does not answer the cases where medical supervision is necessary.
Georgie, you forgot to mention the round the clock medical supwrvision and MD/NP on call 24/7. Sorry my mom has dementia and several comorbid medical conditions. She gets medical care in her facility that no family member of ours can give.
From another angle. Have you talked to your son about this? Does he want the home or would he sell it? My two children would not move to the town where I am living. Both of them are really too far away to even effectively use it as a rental. My experience has been that often things we value are not valued by the other generation. For example, My oldest daughter has 40 acres in a state 1,800 miles away from me. I live in town, no way would she want to be bothered, she and her sister would just sell the house. My mother loved the dark cherry wood furniture. I hate it, so does my brother. Thank God she willed it to him and he just gave it away. My girlfriend who is 70 is stuck with 3 sets of "good" china, place settings for 12, from her Mother, Mother-in-Law, and Grandmother. She doesn't do "set down" dinners. Her kids don't want them. What to do... Does he want the house or will he just sell it. If you haven't done so, talk to him.
I congratulate you for planning ahead but I would consult an elder law attorney for this. Every state has its own laws. The sooner you have this figured out the better. Best wishes, Carol
My FIL acrrued $8200 in 10 weeks in our county facility. Good care, good food, and he was happy there. I think there is a big difference in thinking you could easily hire help and the actual experience.
Okay Dustien: Here's my point though. There are people in this country who desperately need a job and would be happy to have a place to sleep, free food and rent free. They would be happy to get $55 a day = $1540 a month "spending money". If you put an ad on Craigs List and screen them properly, most people on Social Security could easily cover that expense.... That's my point. My sister-in-law said that she could easily find a person from Ecuador ( her country) who would be more than willing to do this and even agree to sleep on the floor if necessary. AND, if you use any care giving agency in this country, ninety-nine of those people are black people who don't even speak English clearly and are very expensive. I know because my aunt has used these agencies and their caregivers are extremely difficult to communicate with and some even rude and temperamental.
Georgie, problem comes when a parent needs someone there 24/7 like my dad does. My brother and sister in law was not getting sleep, as he was up half the night and throughout the day, and trying to walk (and often falling). In one month's time he had to have emergency trips by ambulance 3 times. Lack of sleep was causing SILs own health issues to flair to the point that if something wasn't done soon, she was going to be unable to care for him at all. The cost to have someone come in to stay the night 7 days a week with dad was going to be 75.00/day (2200.00/mo) and that still left my sis in law watching him 16 hours a day 7 days a week and still waking at night when she'd hear him moving around even if someone else was there. Add another caregiver to pick up a 2nd shift per day to help her out and the cost would have been another 2200.00 a month..
The Assisted Living facility he's in costs 3200.00/mo and includes all his food, 24/7 aids and a staff nurse for every 12 hour shift, his own little apartment with a patio, daily activities, van to take them shopping, dr. appointments and more.
Yes, it's costly, but not as costly as having tried to keep him in their home would have costs both far as money was concerned as well as the toll taken on both my SIL and my brother.
There often comes a time when keeping a senior at home is not far less costly and not the best answer at all. Quite the contrary, as in the case with my Dad.
BTW... 8000.00/mo is only going to be in the largest population centers such as New England or the LA Basis or San Francisco. Nursing homes in NE Texas where my dad is range from 4000.00 to 4500.00. It might pay to move to another state with a parent if that's an option.
Losing our investment in our homes is an issue that we all worry about. Nursing homes cost on average between six and eight thousand a month! That can deplete every penny you've worked so hard to accumulate over the years. What's wrong with trying to simply stay home and hire an in-home aide instead?? That would be far less costly and by not going through an agency, you can find someone who would be happy to have a job that would be far less costly and might even be willing to work for minimum wage! Years ago there were very few nursing homes and people lived and died in their homes. These nursing homes are an "expensive ripoff". Just a bed and a little food for $8,000 a month? Unless you are poor, have NO assets and are on Medicaid, stay home!!
BeeThere...don't get me wrong, as I know there are some out there who do need help because they are truly mentally or physically unable to hold good paying jobs. However, I think there are many more out there who simply chose not to save money, chose not to buy ltc insurance, to set aside something for their twilight years... People who make a concious choice instead to live beyond their means, drive fancy cars, eat out two or three nights a week, spend lavishly on vacations and simply turn a blind eye to what they would do when old age comes along and the nursing home comes knocking. It's those people that I feel should not be our responsibility at all.
I feel more for someone like this poster who worked hard and saved enough to pay their house off and don't begrudge them wanting to be able to pass on some of that hard earned assets to their children, then I do paying for those who never saved and thought only of their here and now (remember, not talking about those that didn't have the mental capacity to do this).
I, personally, think the government should only pay for those who were unable to able to save for their retirement throughout their lives (using Income Tax returns from the last 20 years to prove need), and not for those who were more then able to save, or buy LTC but simply not willing to do so. Good thing I'm not running the government...eh?
It IS possible to protect the house from Medicaid liens and estate recovery! First of all, in some states, the deed simply needs to reflect that upon the owner's death the house passes by right of survivorship to someone else. In all states, if the house has been in an irrevocable trust for at least 5 years before the owner applies for Medicaid, then there is no transfer penalty AND there is no estate recovery possible against the house.
However, if the owner needs to apply before that five-year period is over, then they may be stuck owing the government for its Medicaid outlays on the owner's behalf. Thus, early planning is vital!
I discuss all of these techniques in my eBook "Protecting Your Home--Estate Recovery", I highly recommend this to you. Best of luck!
While I understand that most folks want to be able to leave something for their children, how many of us really understand that Medicaid is to benefit those who don't have trusts, or CD's, or multiple homes, or thousands in the bank. I don't mean to be rude, but if Medicaid money is used to help a person that is able to help themselves, what will be available for those of us who follow? For those of us who don't own homes, etc. Medicaid is meant to help people who are financially unable to take care of themselves in their elder years.
About LTC policies, read the fine print: my husband has an AMA policy he's been paying into for 26 years. We discovered we'd have to self-pay 180 days before the policy pays anything at all ! At some $350 a day, that's a lot of money! Hope to care for him at home as long as possible. Hospice is wonderful, and Medicare seems to be paying 100%. A godsend for us.
My dad took out a long term car policy when he was in his early 50s. It was a perk offered to employees of his job. Thank goodness he did. He paid only 36.00/mo and it's now covering nearly 1/2 of his Assisted Living care and his SS check covers the rest so now he'll be able to pass his home along to my brothers and I.
Of course taking out a policy today is going to cost more, but do look into it. Figure out what your SS is going to be, subtract any bills you might have (taxes on your home, life insurance policy, etc) and then take out a LTC policy that will cover the difference. That will help hold the cost down. Also, keep in mind inflation. When my dad took out his policy, the amount would have covered 100% of any care needed...but now, 30 years later, it only covers 1/2 of his assisted living costs, which are less then full nursing home costs.
Given the information provided, how do you know she is/was on Medicaid? Yes, I know state/government programs will come after one's home as repayment...
Bob, I like your response to the question and especially like your "Grace & Peace" message. Some days this journey becomes one breath at a time for me.
Ferris is correct in referring to construction or workers' liens. I believe that was the ONLY aspect of liens to which she was referring. She prefaced her comments by stating she wasn't exactly sure what the OP was referring to.
Frankly, neither was I. The OP didn't distinguish between Medicaid or any other type of nonmedical care lien.
I agree Ferris is incorrect about liens. There are a variety of types of liens. I filed hundreds of federal tax liens for the IRS when working to collect back taxes.
I'm not exactly sure what you are asking, but no one can put a lien on your house unless you had some work done it, didn't pay the bill, etc., or you owe on back payments to an HOA. You can do a simple "Quit-Claim" deed making your son a co-owner of the house, file it with your assessor's office and it will be recorded. Try to stay out of a "rest home" as you might enjoy your own home more. Best wishes!
If you decide to shop for LTC policy. Do your homework, the policy my mom had was excellent, she bought it years ago, so the premium was low, and coverage excellent! They may not have policies like that any longer. Now, when you forget to pay your premiums, the insurance company uses your money to pay for someone else's care.
I agree that you need to see a lawyer, be even then you may not be able to secure the house for you son. Even with a LTC policy. You need to be aware that even if you have a long term care policy, they may not cover the entire cost of long term care. We looked into buying one for ourselves after seeing how things went for my folks. The cost of the LTC policy was far more than we could ever afford anyway and the amount it would have covered (at that future time) would have been thousands of dollars less per month than care would cost (even now). Meaning our assets would be eaten up by the care costs anyway (although slightly slower, but not by much).. So it was a choice of: live like paupers now, and IF we live to need LTC, then use up all our assets eventually anyway; OR skip the LTC insurance, keep going on a short vacation each year, enjoy our moderate life, and be as generous to our children now as we can handle, while there is still enough time that any gifts won't fall into the "look back time."
That, ideally, is what we all want, pass our assets to our children. My mom has a trust and the house is part of it. However, she did not have much in the way of cash assets. She thought the trust would protect them. It doesn't. Her solution was to purchase a long term care policy that would have paid for assisted living, memory care, nursing home for a set number of years. I say "would have" because she either forgot to pay the bill (she was diagnosed with dementia about eleven years ago) or she decided her good planning for old age would not be needed (also could easily be due to dementia). The long term policy lapsed, she had paid into it for about ten years. Then it was money down the drain, you do not get those premiums back and once diagnosed you cannot purchase or reinstate a LTC policy.
She has now gone through her cash assets and is spending down the assets from her house to pay for her care. When those are gone there will be a need to apply for Medicaid. Sad, isn't it?
So, my advice, purchase a LTC policy, have someone else responsible for payment of the premium in case you develop dementia. Medicaid allows the ownership of one car and one home. The home has the potential to provide income if rented making less money necessary from Medicaid each month. Any shortage would be paid by taxpayers, then upon your death there would be a lien on the home by Medicaid to recover monies spent by all of us for your care.
Some states do not allow for unsecured liens to be placed on property. Like a Mortgage co as a secured creditor can place a lien but medicaid is not a secured creditor so cannot.
MERP may not necessarily be ahead of heirs. Heirs may have exemptions and exclusions to recovery which can be filed and reduce or eliminate recovery. It totally falls on family or heirs to determine this, then file and with documentation.
Each heir has to do their own. So if house is 100k and 3 heirs, and 1 was caregiver exemption, 1 low income exemption, then recovery is only on the 33k that the 3rd heir with no exemptions owes to get release. Family then works it out internally to pay off the 33k and own the house. MERP bill could be 200k but it s limited to whatever the value is of the estates assets. Heirs not responsible for amount over estate asset value at time of death or as filed in probate and signed off by judge.
If the elder has been on NH medicaid then someone has been paying on all the costs on the empty house since day 1 of NH stay. Those costs can probably under states administrative code be exclusions to the Medicaid tally but family need to document every penny and submit to state or it's outside contractor. Family can do an agreement or promissory note with elder as to those costs to be secured debt which could become a lien or probate claim.
MERP could find its outside of cost-effectiveness for recovery. Federal guidelines- I believe- are assets over 3k or a recoverable estate over 10k. Low value property with exemptions or exclusions by heirs and probate opened could be under.
Also if probate opened, then however probate runs for assets of & claims against the estate is the system to which all must follow. For example, for TX probate its a level of claim by class and MERP is a class 7 class; class 1 - 6 which includes executor costs, funeral & burial and other secured claims are ahead of a class 7 claim in being settled; credit cards are class 8. Very different Recovery from a state where all claims are equal.
Some states seem to not persue recovery if property is below a certain value..... like for MS it seems to be only done for property over 65k assessor value.
Family & heirs have to be proactive to deal with MERP. If they do nothing, do not respond to merp's NOI (notice of intent), file no exemptions or exclusions; do not track & documents costs; or open probate, etc. then the state or it's outside contractor for MERP then assume a claim or lein can be filed and it is cost effective to do so and it will happen. Dealing with MERP can be done but will not be simple and will have costs of both $ & time and runs a risk of not being able to do the follow through needed as your elder could live another 6 mos or 6 years.... and the heirs situation can change as well over time.
Might be worth checking into if you live in an area where nursing homes are over 7000.00/mo but in those areas you'll still be hard pressed find anyone trustworthy, willing, dependable and capable willing to work 12 hours a day for less then 100.00. Then there's the fact that you then become the employer and so have to deal with employee taxes and such....you can't expect your senior to take care of the paperwork. No, you must not have had to deal with what my brother and sis in law went through. All is good now, and dad is in a safe place. With all that he has against him medically, we couldn't be happier, even if might means he will have nothing left to pass along to us kids.
For example, My oldest daughter has 40 acres in a state 1,800 miles away from me. I live in town, no way would she want to be bothered, she and her sister would just sell the house. My mother loved the dark cherry wood furniture. I hate it, so does my brother. Thank God she willed it to him and he just gave it away.
My girlfriend who is 70 is stuck with 3 sets of "good" china, place settings for 12, from her Mother, Mother-in-Law, and Grandmother. She doesn't do "set down" dinners. Her kids don't want them. What to do...
Does he want the house or will he just sell it. If you haven't done so, talk to him.
Best wishes,
Carol
The Assisted Living facility he's in costs 3200.00/mo and includes all his food, 24/7 aids and a staff nurse for every 12 hour shift, his own little apartment with a patio, daily activities, van to take them shopping, dr. appointments and more.
Yes, it's costly, but not as costly as having tried to keep him in their home would have costs both far as money was concerned as well as the toll taken on both my SIL and my brother.
There often comes a time when keeping a senior at home is not far less costly and not the best answer at all. Quite the contrary, as in the case with my Dad.
BTW... 8000.00/mo is only going to be in the largest population centers such as New England or the LA Basis or San Francisco. Nursing homes in NE Texas where my dad is range from 4000.00 to 4500.00. It might pay to move to another state with a parent if that's an option.
I feel more for someone like this poster who worked hard and saved enough to pay their house off and don't begrudge them wanting to be able to pass on some of that hard earned assets to their children, then I do paying for those who never saved and thought only of their here and now (remember, not talking about those that didn't have the mental capacity to do this).
I, personally, think the government should only pay for those who were unable to able to save for their retirement throughout their lives (using Income Tax returns from the last 20 years to prove need), and not for those who were more then able to save, or buy LTC but simply not willing to do so. Good thing I'm not running the government...eh?
However, if the owner needs to apply before that five-year period is over, then they may be stuck owing the government for its Medicaid outlays on the owner's behalf. Thus, early planning is vital!
I discuss all of these techniques in my eBook "Protecting Your Home--Estate Recovery", I highly recommend this to you. Best of luck!
Of course taking out a policy today is going to cost more, but do look into it. Figure out what your SS is going to be, subtract any bills you might have (taxes on your home, life insurance policy, etc) and then take out a LTC policy that will cover the difference. That will help hold the cost down. Also, keep in mind inflation. When my dad took out his policy, the amount would have covered 100% of any care needed...but now, 30 years later, it only covers 1/2 of his assisted living costs, which are less then full nursing home costs.
Frankly, neither was I. The OP didn't distinguish between Medicaid or any other type of nonmedical care lien.
She has now gone through her cash assets and is spending down the assets from her house to pay for her care. When those are gone there will be a need to apply for Medicaid. Sad, isn't it?
So, my advice, purchase a LTC policy, have someone else responsible for payment of the premium in case you develop dementia. Medicaid allows the ownership of one car and one home. The home has the potential to provide income if rented making less money necessary from Medicaid each month. Any shortage would be paid by taxpayers, then upon your death there would be a lien on the home by Medicaid to recover monies spent by all of us for your care.