All Forum Posts by: Max Bellino

@Max Bellino

I did a little more research (being the curious one....) and I was off on exactly what is allowed on medicaid.  You are allowed to have a house... as long as you are living in it or plan to return to it.  But otherwise the asset limit is still $2,000 to $5,000.  Obviously if you are working with a lawyer they know more than we do on all this.   

I think what you are talking about is what is called the Estate Recovery Program... where after someone passes away, Medicaid would seek to recover what they paid for the patient out of the proceeds of their remaining assets... which is often the house.  I pasted in the blurb below... but this is the link to Florida's program... to which I imagine it is similar across the country given it is a Federal program:

https://www.medicaidplanningas... 

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Exemption Rules
For home exemption, the Medicaid applicant must live in their home or have Intent to Return, and in 2023, have a home equity interest no greater than $688,000. Equity interest is the amount of the home’s value owned by the applicant after subtracting any home debt. If a non-applicant spouse lives in the home, it is exempt regardless of any other circumstances. For seniors applying for Regular Medicaid, there is no home equity interest limit.

While one’s home is generally exempt from Medicaid’s asset limit, it is not exempt from Medicaid’s Estate Recovery Program. Following a long-term care Medicaid beneficiary’s death, Florida’s Medicaid agency attempts reimbursement of care costs through whatever estate of the deceased still remains. This is often the home. Without proper planning strategies in place, the home will be used to reimburse Medicaid for providing care rather than going to family as inheritance.

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This is a fairly succinct look at income limits.  It was higher than what I thought.  

Wish you all the best with this.  Government agencies are so fun to deal with, I'm sure!

Randy

@Max Bellino

So, not to rain on your parade... but if your thought process around the government supporting your grandmother is centered on Medicaid, you are going to be out of luck.  Medicaid does a 5 year look-back as to assets in her name to specifically exclude patients who gift their assets to qualify for Medicaid. So if that is the case, it won't even matter if you sell the asset, as it would be seen as an asset of hers for the next 5 years (or the proceeds would be seen as hers if it was sold).

Here is a link that has more details:

https://www.medicaidplanningas... 

Otherwise, the easiest thing to do is to have a cosigner on the loan to get you over the age & income hump.  You can manage it, etc, and just let it ride in whomever's names until you could eventually refinance the property into yours when you have more income.  You would just need to coordinate on depreciation and such if you were filing taxes separately.  I imagine there is a way for you to split the deductions & such if needed - or one person could take them all, but a CPA could speak to that better.  It is highly likely you will want to refinance it anyway down the road because you will be buying it at a fairly high interest rate in today's rate environment if the first issue of Medicaid doesn't scrap the deal to begin with.

She could still sell the house and then use the funds to pay for her care... so the house can still stay in the family's name though.

Wish you all the best!

Randy

 @Konstantin Ginzburg

The OP has not clarified, but from the nature of the post, I am making a presumption that they want to get the grandmother qualified for (Federal) Medicaid.  Medicaid is sort of the medical insurance of last resort for the poor.  You are only allowed to have assets totaling $2,000 to $3,000... PERIOD.  So if you own a home, or anything else of value (there are a few exceptions) you do not qualify for Medicaid.   The idea  is that you could sell your assets and pay for your healthcare coverage yourself.  

It appears the OP wants to get the house out of his grandmother's name so that she would qualify for Medicaid.  I was saying that the Medicaid program does a 5 year lookback for any assets, so the idea of selling the house will not accomplish the objective of getting her on Medicaid (if that is actually what he is attempting to do

Randy

 Many options, here are a couple:

-You could have her transfer it to a trust- say to the benefit of her kids or grand kids or whoever. Then you buy it from the trust either for seller financing, or conventional with a small seller carry back. Potential cuts the state our completely?

- Taking on a partner or co-signer is not that big a risk if done well. If you found someone who has done rentals before then you could actually benefit and learn from them on the transaction. and you probably would not need to give away to much of the deal, especially if you already have the down payment. And could be a good BRRRR where you cash them out in a refi in a year or 2.

- If the state has not yet taken the house, or started the process then you could still do seller finance for some or all, and the state can shove it. If this has to do with her not having an ongoing income then that could still be an issue though.

- Your grandma could 'gift' some or all of the house to 1 or many people. as an example she gifts 10 family members 10K or 1% of the house and the amount you pay at the sale goes to her costs/ the government. then the other family members are the seller financing for the rest.

There are many unknowns in your situation, so these may or may not apply. Either way you should consult an attorney and CPA to help set any of these up and verify they are legit, but I would think it would be worth the cost, if only for the education of what is possible.

Don’t do anything.  The state and fed “will” go back through all her records and look for any asset or cash transfers minimum of two years.  Those funds will need to be returned to her account. Even if whoever received them loses money.  

Go talk with an assisted living provider and pose your question.  And timing.  All her assets up to $2,000 used up first before government pays.  

Is she mentally capable?  Is there a power of attorney?  Any relative or debtor can challenge if this is not in place.