Should my Mom rent her home to pay for husband's care? They own the home, with no mortgage. -

Should my Mom rent her home to pay for husband's care? They own the home, with no mortgage.


Can you recommend a web site to help determine what she would have to charge in rent to realize enough profit. Legal issues, tax issues, expenses to rent etc.

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With "safe" investment income being as it is these days (1-3% return) we really had no option but to rent moms home to assist in paying for her board and care. (An investment guy mentioned that it takes about $300,000 to realize just $1000 month in income.) Renting has its pitfalls but advantages too. We are getting $1900 in rents on a $350,000 property.(it would be more like $2200 a month but its a senior community 55yr min. which we found was a bit more difficult to rent) Even after expenses we feel we are ahead of the game plus we are preserving a great investment for moms heirs. With moms Social Security and the rents we are pretty much covered and are preserving her house asset and her other small assets. If at all possible you should try to preserve the asset and not spend it away. A previous post mentions that after they sold moms home they are now all out of moms money and mom still being with them requires that all expenses now come out of their own pockets. This is not good for mom, them nor other heirs. I would also like to mention that in my opinion Reverse Mortgages should also be avoided if at all possible. Anyway, in our area (Ventura County CA) we found that nursing homes were just too costly at approx. $6750@mo vs. Board and Care at $3000@mo. and we actually like it better. Board and Care is simply just a residential home in which they are allowed to have up to 6 clients in at a time. Ours has two care givers all day long and one at night. The caregivers are wonderful and mom seems very content there without that institutionalization feeling. A shared bedroom goes for $2500 and a separate bedroom is $3000. We fixed up moms room really cute bringing in her paintings and family pictures, TV, easy chair, etc. Its just like being at home for her. Craigslist is a great advertising tool to get it rented. If you stop by a local realtor they might be nice enough to supply you with a good rental agreement and application forms or you can get them on line. Get the prospects to supply you with their credit report which they can get online at various places for free. I add an addendum to my agreement stating that their is no grace period and that if the rent is not paid on the first of each month there is a 5% penalty per day until paid. This seems to get the rent paid on time each month. Don't be timid you can do this guys. There is plenty of help online these days. I sign them up to begin with for a one year lease then I just let it revert to month to month after the first year. Good luck all and God Bless.
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Can you dad qualify for Medicaid? Is renting the house all for paying for his NH?
Is there a reason to want to keep the house, if you could have dad on Medicaid?
Like mom wants to stay living in the house....
If so, your mom can continue to live in the house as she would be considered the "community spouse", she would need to be under whatever your state has as the asset limit for community spouse (which in most states is about $ 110K) and she can apply for a diversion of some on his SS and retirement to live on if she has no income of her own. This is especially good if the at home spouse is younger or very healthy elder and likely will outlive the NH spouse.

The NH does NOT take their home. Neither the NH or the state wants to be saddled with a bunch of old people's homes filled with their stuff and the likely decades of delayed renovation and repairs. What the NH wants is to be paid for their stay. Whether that is private pay, LTC insurance or by Medicaid, they want to be paid. If placing a lien on the property for non-payment happens, it is as any other debt collector would do - it's a way to make you have to do something to pay the debt. If they go on Medicaid, the state is required under MERP (Medicaid Estate Recovery Program) to seek reimbursement of what Medicaid paid for their NH stay from their estate after death. Now since under Medicaid, the only asset they can have an still qualify for Medicaid is their home or a car, then a claim or lein on the property is how MERP can force getting some $$ back from the proceeds of the sale of the home. Just How MERP is done depends on how your state has set up it's death and probate laws. MERP is done through probate. Some states place a lien on the property, while other states do a claim. My mom is in TX and TX is a level of claim probate state. MERP in TX is a class 7 claim, so all expenses and claims in class 1 -6 get paid first and foremost before MERP gets anything. Credit cards are level 8 claim, so they are pretty well s*** out of luck on getting paid. MERP still happens in TX but the rate is lower than a state that is a equal level of claim state or a lein state. If they die without a will - intestate - in TX
it is especially sticky for family with a house, because under TX law, all property accedes to the state as owner until heirship is determined, so MERP has a much better position to force a sell in these situations. State law makes a big difference, understand?

There's alot of things to consider and your state's laws will make a difference. Really the best thing is to go an see an experienced elder care attorney.
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I would go to a lawyer with your Mom or alone if you are her DPOA. What we did is sell our parents home and used it for her care with a caregivers contact to pay myself (I left my job) and the rest for respite and supplies. Once the money was gone, of course we pay for everything now and paid it back ultimately, but the siblings who didnt help get nothing as well deserved. Its a long road but so worth it. If you are thinking nursing home, this is a legal way to spend down her money also, but we are keeping Mom with us forever. If your Mom is renting her home still owning it, its an asset and should she need a nursing home, the nursing home will take it and she will lose all the money. (at least in our State, they put a lein on your house) Good luck and get an attorney to do it right, its the only way.
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