Is putting my mom in a reverse mortgage situation a good idea? - AgingCare.com

Is putting my mom in a reverse mortgage situation a good idea?

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My mom recently had a stroke and needed to be put in an assisted living facility. She still owns her home with a mortgage payment. I am looking into putting her into a reverse mortgage situation. She currently owes the assisted living facility $12530.00. She has not other assets of money and makes too much money for assistance from the state of Maryland. Do you think this is a good idea? Also, the house is currently up for sale.

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I am not unsympathetic to those whose assets are running low and are not able to pay for assisted living or nursing home care, but I get a little weary, and yes, even perturbed when seniors and their children scramble to move their assets around so that the "evil, money-sucking" nursing home or government Medicaid program can't "steal my hard-earned money." The nursing home staff who care for our loved ones need to be paid, and the costs of running these facilities is high. Someone has to pay for these services. Is it not disingenuous for everyone to hide their assets and ask the government to pay for our loved ones care, and then complain about or refuse to pay increased taxes? When did it become acceptable, admirable, and "smart" to do this?
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You cannot get a reverse mortgage because she is no longer in the house. Sell the house and use the money towards her care at assisted living. When that runs low, the facility will assist you in applying for Medicaid.
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What law said your moms assets were there to give to children and grandchildren while the rest of us pick up the bill for her care? The assets are there to take care of her when she needs it. The facility and others providing care are not "taking" moms money they are getting paid for providing a service.
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RPerkins14, it is not a good idea to sign anything over to grown children or grandchildren as that throws a huge wrench in the works when it comes to having an elder apply for Medicaid within the next 5 years. Anything signed over will be considered "gifts" thus those dollar amounts will be subtracted from the elder's care.... the elder would have to be self-pay for many months or years.

Regarding taking over a mortgage, if a mortgage company gets wind that the home owner herself isn't making the payments, the mortgage could become due in full. One would need to read over the mortgage papers to see if such clauses are in force. If that happens, the person who is taking over the mortgage would need to apply for a mortgage him/herself.

DNHnana, be sure that the house is listed at fair market value, otherwise Medicaid might see a low price as a red flag.

I know all of this is so complex.... wish it was much simpler as you have enough on your plate.
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Please consult a certified eldercare attorney before you take any action.
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We have been through this same situation with my father-in-law and mother-in-law. We sold the house even though we took a loss. We were able to write off the loss with the IRS. My father-in-law passed away and the money's coming in was cut in half. My mother-in-law income has been cut in half and will soon run out. In our state when the person is still in assisted living or a nursing home, the state will take over the cost of caregiving.
Once again this should have been addressed by a good estate planner and attorney. I made these plans when I was in my 50's, I worked in a high-risk job situation and knew that I could be killed or injured and unable to work. I still live in my home but because of good planning we have all situation covered. I am in my early 70's and realized that something could happen to me anytime. My wife is in her mid 60's and she is protected too. We have addressed all situation so there will be no issue for my daughter.
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DNH - 12k to facility... Is she current on her mortgage or about to default?
I'd bet there are also bills related to her stroke too. My suggestion is for you to contact the Realtor today and tell them mom is a "very motivated seller" and get the house sold ASAP. Mortgage gets paid off at closing and hopefully there is also enough $$ to pay off AL bill and to pay to get with an elder atty to update all moms legal and determine how to get mom eligible for Medicaid. Eligibility could mean she does a medicaid compliant special needs trust for extra $ from house sale $ &/or Miller trust for income overage if a Miller can work for her situation (so can be on Medicaid).

Please remember all $$ must clearly show that it was spent on moms care or moms needs. You probably can't easily reinburse yourself for things you paid for on the house, her care, etc as medicaid tends to assume family just pays for things out of a sense of familial duty without reinbursement and will consider any $ from mom to you to be gifting and will cause a transfer penalty issue for her Medicaid eligibility. So no $$ to you.

If your mom is on the young side it may be an estate atty.who does SNT rather than one who does elder law. You are her DPOA, MPOA already, right? If not and the stroke was intense, there could be guardianship needed to be done as well.

House needs to get sold as mortgage holder will foreclosure if not current. You dont want mom to loose any equity she has in the house. Get it sold ASAP.
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Like Pam said, mom can only apply for a reverse mortgage if she is living in the house.
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If she is over the Medicaid limit because her income from SS and pension is too high, get to and eldercare attorney to do a pooled income trust, some times called a Miller trust, so that she qualifies.
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Barb is absolutely right, always get a GOOD elder care attorney. But also plan ahead with a good estate planning attorney. As the old Euripides quote goes: " No one can confidently say that he will still be living tomorrow" and "Arm yourself, my heart: the thing that you must do is fearful, yet inevitable"
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