I've received conflicting advice regarding whether my mom should/shouldn't sell her house (or put a child on the deed) and implications for Medicaid LTC qualification as a countable asset. When can the house be sold and not impact Medicaid LTC qualification? What are the implications of putting a adult child on the deed?
It would seriously SLAY me, SHATTER me to think I protected assets such as a home for me and my sibs while mom received Medicaid. The sad truth is that the care in such facilities isn't up to the standards of private care in most cases.
As to your question, now (without my pesky opinions):
You need to see an elder law attorney for options for this reason:
You say you have received conflicting advice. Understand that this is an international Forum of caregivers and ex caregivers who will give you but MORE conflicting advice, and I would be most happy to do that were it not negligent of me to do so.
You need EXPERT advice for things legal and financial. These are not things you can make a mistake about. Each state has its own laws. Igloo, here on Forum, has a WEALTH of information on just this sort of thing, and yet she almost always ends with "This is not DIY stuff" as in "do it yourself".
Please get advice. Take all asset info to your own attorney. If you are POA your principal who appointed you to protect her (namely "mom") pays for this. This is a good thing to do as a check up and check in for advice ANYWAY.
And lastly, the best of luck to you, and to your mom.
PS Mark, do feel free to call a Medicare advisor for your state to ask questions. But do realize that it isn't the same as good solid advice from your attorney. Could just be the "new person" on that day. It's sure better than nothing, but ....................
I don't know but this may differ from state to state because medicaid is administered differently depending on the state. Also, whether facility is for profit or not for profit may factor in to quality of care. Blessings!
No you cannot transfer the title to yourself. It could have been done 5 years ago but now is too late.
As far as selling now or later. If mom is going into LTC, she is still responsible for all taxes and upkeep, least it ends up forclosed for non payment of taxes. Selling now helps qualify her for a good facility for a couple of years
The house can be sold and the person is self pay until the money runs out, then Medicaid can step in.
All assets should be used for the LO, Medicaid is a last choice.
However, if a child is added to the deed of a house and subsequently becomes the owner when the parent dies, that child inherits the parent's cost basis for tax purposes. That means that if Mom paid, say, $45,000 for their house 50 years ago, and you go to sell it right after she dies for $300,000, you'll be paying capital gains taxes of at least 15% on that $255,000 profit, or $38,250.
If you inherit the house from Mom instead (not put on the deed before she dies), your new cost basis is what the house was worth on the day she dies, so $300,000. If you sell it for $300,000, you'd owe no tax and will pocket the entire $255,000 profit.
Consult an accountant for details specific to your state, but that's the gist of it.
Putting a child on the deed before the Medicaid 5yr look back is a no no. Thats hiding assets. Have it a 50/50 deal is not good. The deed where she gives over the house but gets to live there till death is tricky too. If they all can be done before the 5 yr lookback (some states 3) no problem.
Me personally, would never be a co-owner. Medicaid allows a house to be an exempt asset until death and then they can recover. Even though they can only recover on the recipients half, the house will have a lien on it. There are so many in and outs with Medicaid that you really need an elder lawyer to look at Moms situation and go from there.