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Her grandaughter and husband currently live there. I was recently notified that my mother has plateaued in her care and is being recommended for long term care. I will be applying for Medicaid. Will they be able to take her house, which is already paid for?

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Also each of moms heirs will need to apply for their own exemption or exclusion to MERP. So say the appraised value of the property is 150k. There are 3 heirs: your disabled brother; your sister married to the hedge fund manager; & you who is the named executor as per moms will. Bro will qualify for disabled & low income heir & bro files for & gets a release of his share of the claim/lien. You as executor will likely have 50k in expenses on the property to be filed in probate and you as executor will enforce the claim at the act of sale. But Sissys 50k -1/3 share will linger as a lein on the property. When it goes to be sold, the state will have to be paid in order for the lien to be lifted as it will be a "cloud" on the title. More than likely you will need a real estate atty who specializes with real property transfers involving property in probate to do the Act of Sale /Deed of Trust paperwork. If its being sold open market with a Realtor, all this well it could kill the sale as its going to add on time to closing which the mortgage co won't allow.
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So becky your about to apply for medicaid to pay for mom to continue to stay as "medicaid pending" at the facility she is currently in for rehab, correct?

You are about to be overwhelmed! ASAP from the NH get the list of items required to accompany the Medicaid application. Look to see if anything is going to be an asset (2k is the ceiling for nonexempt assets) that will need to be liquidated and spent down. Like mom has a whole life policy...it will need to be cashed out before Medicaid eligibility. Tally up moms monthly income to see is she is under the medicaid income ceiling (most states have this at $ 2,100 a mo). I'd suggest doing these first before getting in a flux on the house...the house is an exempt assest plus is paid for and should be a secondary or even third priority for your time & energy as moms daughter & DPOA imho. Getting all the other documentation required by medicaid dealt with needs to be número uno.

Your mothers house will be viewed as an exempt asset by Medicaid. Mom can continue to keep it for the rest of her lifetime. But upon her death it will become a nonexempt asset of her estate and subject to a claim or lein by the state to reinburse for the costs of care paid by medicaid. This is done via MERP (estate recovery). There are all sorts of exemptions, exclusions and cost effectiveness standards within MERP. The caregiver exemption that Jeanne mentioned is just one of these. It is totally on family & heirs to document and apply for any exemptions, etc and to deal with any legal (probate, lineal heirship, etc) needed to get through moms estate.

But to me worrying about what happens with estate recovery is putting the cart in front of the horse regarding the house. Although moms house as an "exempt asset" sounds just fabulous, it poses a long term financial problem. Once mom goes onto Medicaid, she will be required to do a copay under Medicaid rules. All of her monthly income $$ less a small personal needs allowance MUST be paid to the NH as her required SOC (share of cost). Mom will have no-none-nada of her $ anymore to ever pay a dime on anything house. So taxes, insurance (will likely need a new policy too), utilities, repairs, etc will need to paid by others and for the rest of moms life and then however long probate & MERP takes. And whomever will be the heirs & the executor will need to keep detailed documentation on all expenses for both future filings with MERP & probate. It could be totally do-able & affordable by you. To me it is like having a 2nd or 3rd home but with no guarantee of ownership so runs a risk. The degree of risk could be well within what you can deal with especially if this is a somewhat lower value home (under 100K) as the cost effectiness requirement is a factor. If this is a home over 100k and the heirs (as per a valid will) do NOT qualify for any exemptions, etc. there will be a claim or lien placed on the property that will need to be settled with MERP before it can be sold or transferred. Whether its a claim or a lien...well which & how will deend on your state laws and administrative code.

But what seems to happen is that family is all gung-ho at first and then a few months later stop doing /paying. So all costs & dealings with the property will all fall to you from now till whenever. Costs on a 400k home will be quite different than one 40k.

What seems to happen is that within the first 6 mos or so of mom moving into a NH is that the DPOA puts the house on the market; house gets sold at FMV usually based on what the tax assessor value places it at; proceeds from the sale takes mom over Medicaid limits; so mom reverts to private pay which means yiu as DPOA has to sign off on a contract at the NH; family cannot get any of the $ from the sale either unless they have a valid legally binding lien on the property (like your BIL is a licensed contractor and mom has a contract with him for repairs and he places at the courthouse a lien for nonpayment on the house) so all those things you paid for are basically a gift to mom; mom may need to fully reinburse the state for costs of care paid by medicaid from the proceeds (this is a? for an elder law atty to answer as this is going to vary by state); only when mom again becomes impoverished can she apply for Medicaid.

It's a lot to think about. Personally I'd totally hold off on submitting the Medicaid application till you review moms income & assets, the probable costs on the house, what FMV rentals are in the 'hood and then take this info to meet with an elder atty.

Also if you keep the house, the family who is living there may be expected by the state to be paying FMV rent with a portion of the rent becoming an income source accountable to Medicaid and factors into moms SOC. Renting property takes the house into a whole other level for taxes, insurance, medicaid SOC income.
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Maybe.

Did Granddaughter live there as a caregiver when Mother did? Did Granddaughter's presence keep Mother out of a nursing home for two years or more?
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