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Hi,


My mom lives in a skilled nursing facility in Texas and was recently approved for Medicaid. She has a reverse mortgage on her home. My brother has lived with her since 2017 and is still in the house. My mom will lose the house after 12 months of being in skilled nursing which will be in March of 2023. We will have to let the house go back the the mortgage company then and sell her personal property. My question is, how can I have an estate sale to sell her things without her being disqualified for Medicaid? I am sure the proceeds will put her over the asset limit of $2,000. Any advice is appreciated.

An elder law attorney would be your best source of information. They’re well versed in the ins and outs of a state’s Medicaid rules. I consulted one when I was concerned my brother might lose his benefits and it was very helpful.
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Reply to katepaints
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westwind7: You could do yourself a favor by posing these questions to an elder law attorney. I am unsure why you are letting the reverse mortgage loan default. You will have to do the Medicaid spend down, while keeping diligent records, on such things as a prepaid funeral and other things that qualify.
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Reply to Llamalover47
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The money over will go towards the skilled facility bill. You won't make enough to pay more than a few months at a home. I was so thankful for all the help mom got and we were glad to give back what little was left.
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Reply to Crystal64
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I’m going to approach this from a different perspective….
On the Reverse Mortgage, do you have it in writing that the RM will allow for the house to stay in her name / control till 3/23 (8 months from now) completely and without any other requirements?

I ask as RM have required compliance - beyond the elder living there or up to 1 yr after moving out - to keep the RM in place. All in her mortgage contract. Read & reread the mortgage. Compliance would mean that mom is 100% current on her property taxes, current on all required insurances (homeowners, plus flood & windstorm if required for where she is), property is being maintained (yard cut, no visible issues with roof or other visible structural issues like fireplace or foundation cracking). If there’s anything amiss, the RM can call in the loan. RM Usually send out a letter and want whatever issues resolved in 30 days or RM send out another letter that RM is “called in” so foreclosure done.

As your mom is now on LTC Medicaid, she should be paying almost all her monthly income to the NH as the required by Medicaid copay. So your mom has no-none-nada of her $ to pay anything on or do for her old home with the RM. Is your brother who has been living there for years, picking up the slack and paying all property costs including taxes & utilities? If he is not, then are you from your own wallet paying her taxes, insurance and whatever else property costs?

If you find that in fact taxes are in arrears and insurance isn’t current, go thru all moms mail to see if the RM is aware of this and has sent out notices. If mail still going to mom at the house address, you need to be monitoring this unless you know 100&1% brother is doing this and being responsible on telling you & mom and for paying what’s costs mom can no longer can as he’s befitting.

RM are not big on overlooking delinquent property taxes; it’s not to their benefit to cut the old owner or their family or heirs any slack. Acquiring it and selling it asap makes them $.

so all that being said, unless you & your bro are all ok on paying all costs, then I’d suggest that you sell contents of moms house over time use the funds to pay on property costs. Like estate sale LR & DR contents next mo and use that $ to pay insurance thru end of March 2023; then do the BRs and use for taxes. So no sale goes over $1500. Taxes, I’m pretty sure for the entire state, are due at 50% in Nov for Texas, or 100% in Jan unless she placed herself on quarterly payments before she moved out. She may have lost her homestead exemption & if she has, tax bill that comes out in Oct will probably triple. I’d suggest that you check with her caseworker before doing the estate sale ad & getting a permit but I bet as it will be under $2k from any sale, caseworker will be ok.

She is still responsible for taxes and insurance unless her RM has those costs folded into the loan. If it’s folded into, it will be indicated in the mortgage contract. If this is an older RM, it’s probably not included.

On another tangent, is the caseworker aware brother lives there? If he was her FT caregiver from when he moved there in 2017, it’s probably not an issue. But if he works FT and cannot be considered to have been her caregiver all this time, the State may want him paying rent. FMV rent to her as additional “income”. Again, if the State has as its mailing address for mom as her old property, go thru the mail to see if TX DaDs / Medicaid has sent out any letters regarding status on the house as to empty / vacant or occupied.

For estate sales, H‑E‑B sells permits if in a city with heb & require permitting & Goodwill has a item tax deduction form that’s good to use to determine value.
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Reply to igloo572
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Westwind, unless your mom is upside down in the reverse mortgage, please don't just give it away. You can sell it, pay off the reverse mortgage and mom will have some assets to spend down but, that is better then letting all of her equity go. Believe me when I say she does have equity, RM pays pennies on the dollar, that's why the exist as for profit businesses.

Depending on the amount, she could self pay for a while, get a really awesome wheelchair, new bed, clothes, shoes, new hearing aids, glasses, a new recliner, a new TV or anything else she might need and not lose Medicaid coverage. If she spends it all in between statements, she won't even have to reapply.

I always think asking the source, her Medicaid social worker, how it works and what they can help with or spend some of mom's money on a CELA consultation is the best route to take
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Reply to Isthisrealyreal
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igloo572 Aug 22, 2022
If I’m not mistaken, if family / heirs want to acquire the home if it is a HUD backed RM, they have the option to buy it at 90% of the loan but have to do it in full within a narrow time frame. Like let RM know in writing within 30 days of elders death and pay off the 90% in full within 90 days. If it’s a really old, old RM, it makes total sense as it probably has huge property value increase.

But I don’t see this being done unless family has cash on hand or ability to quickly borrow $$$$. It’s not a normal house sale, where you go thru buyer/seller Realtors, get inspection, appraisal, make offer p(s) and then get lending from a bank as you’re getting a mortgage done. RM $ amount is fixed, pay it or no deahl. RM already have their secondary’s set up to clear / evict/ clean / flip.

Had a couple of friends whose parents had taken out RM (unknown to the kids too, it was special) in Lakeview LakeVista area of New Orleans. Nice 1950/60s contemporary ranchburgers & paid off. When Katrina hit, flood insurance paid the RM first and foremost and RM sent out compliance letters to elderly owner @ the house address requiring details as to when utilities back up and a signed repair contract with a fixed timeline. Was absolutely no way to do any of this. RM foreclosed. Land got cleared & eventually sold. RM beyond ruthless.
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These referenced mortgages really make everything so much harder when Medicaid is involved. All I can say is talk to a Medicaid case worker and run this situation by them. Or consult with an Elder lawyer well versed in Medicaid.

None of my Moms belongings were worth anything so it was trashed, given away and her children took what they wanted. Hopefully someone on the forum has been in your situation and can help.
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