How to sell while in a nursing home

Question

Hello Everyone,

I know someone who's mother is in a nursing and has been for a few years due to no one else being able to care for them.  The daughter has power of attorney and would like to sell her mothers house since it's just a financial drain with upkeep, bills, lawn, and just recently a severe wind storm which caused some damage.  The daughter told me today that she just wants to get rid of the burden but assumes that since Medicaid gets whatever the house sells for so doesn't know what to do.  I asked if she knew if Medicaid put a lien on the house she said no.  I asked if she was aware if she couldn't sell it and she said she just has always heard that was the case.

So my question to all you guys,  what are some possible options, pathways she could go through to sell this house.  Obviously I'm interested in purchasing and if I can help her out then I'm hoping for a decent deal.  If there are no liens on the house would it be possible for her to sell or have the mother sell or gift the house to the daughter.  Let me know what you guys think.

I don't know if it helps but I'm in Wayne County, Michigan.

Thanks everyone

Nathan

Account Closed · Answer

Three things you need to look at.

A Power of Attorney statute in most states has a prohibition against "self-dealing" and a daughter selling her mother's house would be presumed to be self-dealing, regardless of having the purest motive in the world.  Check the Michigan statute.

Second, if the mother is having part or all of her nursing home expenses paid through the SSI program, then Medicaid will have a claim on the estate once the mother dies.  A lien will not be filed in the meantime, but the right to file it will always be there.

Third, the mother is probably qualifying for SSI in spite of the fact that she has an asset that she could sell and make the payments, because the home is exempted from this rule.  Selling the house, which would be converting it to cash, might disqualify the mother from receiving SSI.  These disqualifications can run for more than two years before the person is permitted to re-apply.

This could be about much more than just selling a house.

I hope this helps.

Michael Lantrip

Clay Lingg · Answer

Contact an elder law attorney in the seller's state. I've counseled clients in the exact same situation in Pennsylvania on the proper steps to comply with the 5 year look-back penalty under Medicaid rules using a gifting and Medicaid compliant annuity strategy. Doing so would allow you to purchase the property for half the value without causing an issue with Medicaid, without stopping payment to the nursing facility, and avoiding a filial support claim against the daughter for reimbursement.  Feel free to send me a message if you want more details. Good luck!

David D Painter · Answer

She needs to contact an attorney well versed in elder care. There is a 5 year look back period on this type of transaction so they need to move very carefully. A wrong move could put mama's benefits in jeopardy.

Chris Ichter · Answer

@Clay Lingg Hi Clay - I am over in Lancaster, Pa and would like to connect with you. Can you shoot me a note when you get my invite to connect please.

Nathan Love · Answer

Thanks everyone.  I know the person plans to contact an attorney soon about the whole situation so whatever ideas and suggestions I can give her to take and ask would help. That's all I really want.  I for sure don't want to jeopardize her benefits or care but wanted to see if anyone else had some experience.

@Clay Lingg  I'll go ahead and shoot you a message.

Any other suggestions?

Stanley Parsley · Answer

to get away from all the legal jargon and placing a burden on the family ranch so to speak

place the property in a trust

now rehab the property so the benefits are still active on moms part

then exchange the property or sell out right

remember do not place red flags on the property because both self servitude insurance (SSI) and theirs (The IRS) will want there fair share

you can get with a paralegal in your state to look at the befits and options according to law what you can do

paralegals are my favorite for they know where to look for the laws and are much cheaper than the barge over bar

enjoy

How to sell while in a nursing home

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