Rental property (was father's house) owned 1/2 by sister and husband's trust and 1/2 owned by brother. If brother needs Medicaid will sister's trust be affected? All parties are over the age of 70. Thank you.

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It will be complicated to get through brothers Medicaid application. I’d suggest you get an elder law atty - thats CELA or NAELA-to shepherd brothers application.

Medicaid allows for the applicant to have their homestead property to be an exempt asset for Medicaid. So is the property that for brother & his 50% share? If so, and he has a current valid homestead exemption or whatever your state uses to verify owner occupied, then it would likely viewed as exempt asset & will be somewhat easier for atty. BUT if not - like bro had his own home or apt he lived at - then it’s going to be viewed as an investment property. This will be sticky as those seem to be viewed as non exempt asset for Medicaid and will keep bro from being eligible as worst case scenario OR will require his share of rental to be included in his monthly income copay or SOC. The latter will mean somebody’s will have to do to the decimal accounting, report & pay Medicaid. If your wife is not dpoa for her brother again another complication. 

If the “trust” is being managed, there will be monthly management costs involved in all this. If this is a single item trust - just the house - the trusts assets really should be paying whatever costs attributable to trust by the trustee. 

Has anyone mentioned Medicaid SOC ( share of cost) mandatory requirement? Unless there are specific exclusions (like community spouse or dependent children) once in a facility & on Medicaid all brothers monthly income- like their sS or pension or annuity payment- MUST be paid to the facility. They will have no-none-nada of their $$ anymore to ever pay towards that rental property. All cost will fall onto others to pay from day 1 of medicaid till whenever property is sold or goes through an after death process to transfer ownership of brothers share. All bro will have once on Medicaid will be whatever his state has as the PNA - personal needs allowance- which ranges from $35 - 115 a mo. Most have pna at $60 a mo & really it maybe just covers barber shop costs and some toiletries/ clothing replacement. No $$$ ever for that house.

Also rental received needs to be fair, like fmv rental. If house is in an area where rents are super high, be mindful that brothers regular monthly income-like his SS- plus his 50% rental income (can be adjusted for property costs) must be under your sta es Medicaid monthly maximum. Most states have this about $2,100. 

If this is what is likely to be, please have atty look at what your state law or administrative code has for exclusions to the costs Medicaid paid for whatever you all have paid & will pay on brothers share of the property. Detailed record keeping with receipts will be needed for this as you hopefully will be entering all as an exclusion to his Medicaid tally &/or as a claim to his estate. The atty should be able to advise as how to best do this. But keeping accurate records is all on you.

If Medicaid flat just views the property as non exempt and will not budge, then in order for bro to be eligible for Medicaid, his share of property will need to be sold with the proceeds from the sale used as a spend down till he’s once again Medicaid eligible. He cannot easily repay you for any costs you may have paid on his behalf, as it looks like gifting..... it’s something to speak to atty about. Folks tend to use last tax assessor statement as property value. But if it’s whack, you can get it appraised by a licensed & registered appraiser. They put their licensed # with seal on the document, so it’s legal and that value can be used - to submit to Medicaid or enter in probate- even if lower than assessors. 

If things need to have new legal done it kinda to me eally need to happen BEFORE brother ever submits a Medicaid application. Keeping property once on Medicaid can be done but will not be simple. 
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Manortrust, this is a complex issue. Best to check with an Elder Law Attorney. And it depends on the length of look back in the State. If this investment property was put together less than, lets say 5 years ago, there may be an issue with the equity owned by the brother.
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