One plan is to try to stay in your home for the rest of your life, maybe have your son come in to help take care of you. But that isn't always possible.
Another plan is if you need a higher level of care, such as Assisted Living, then one may have to sell their house and use the equity to pay for such care. My Dad sold his house, and used to self pay for his care.
Another plan is to apply for Medicaid. But later on Medicaid would like to be paid for all the money spent on your care. If you have a house, it is only fair once you have passed, that the house is sold and Medicaid takes what they need to pay your bill. Otherwise, us taxpayers would be paying for your care.
The "hinge" is if yougo to a rest home. If you pay your own way, then the house is not an issue...If you go on Medicaid, then Medicaid will want their outlay to be repayed when you die, and that would likely include their going after your house. Having it in a trust may help you shield it from being taken by Medicaid... Your heirs have no stake in this issue as I see it..If your "trust" shields something for them, good for them..If not, look at the bright side that you will be cared for.
As an aside, my wife has been on Medicaid since June, 2009 and has been in full nursing care since...That has saved us roughly one half million dollars, more or less. Our house has a market value of about $150K...Seems like a pretty good deal for us.
A Certified Elder Law Attorney who specializes in asset protection may be able to help you. nelf.org. You need to start planning immediately if you want to protect your house.
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.
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."
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'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!
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.
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.
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.
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...
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.
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.
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.
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!
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?
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!!
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.
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.
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.
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
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.
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.
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.
Another plan is if you need a higher level of care, such as Assisted Living, then one may have to sell their house and use the equity to pay for such care. My Dad sold his house, and used to self pay for his care.
Another plan is to apply for Medicaid. But later on Medicaid would like to be paid for all the money spent on your care. If you have a house, it is only fair once you have passed, that the house is sold and Medicaid takes what they need to pay your bill. Otherwise, us taxpayers would be paying for your care.
As an aside, my wife has been on Medicaid since June, 2009 and has been in full nursing care since...That has saved us roughly one half million dollars, more or less. Our house has a market value of about $150K...Seems like a pretty good deal for us.
Grace + Peace,
Bob
You need to start planning immediately if you want to protect your house.
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.
Frankly, neither was I. The OP didn't distinguish between Medicaid or any other type of nonmedical care lien.
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.
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!
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?
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.
Best wishes,
Carol
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.