My mom is in a private (not paid for by Medicare) AL home and running out of money so we have to sell her house. How will this impact her?

Thank you for all your wonderful and insightful responses to this question. We did seek legal advice and also have mom's great-niece handling her house so we're on the move. It's so wonderful have so many of you to query. The support on this site in phenomenal. God bless.

hannah - what a great & caring family. Dealing with a home really depends on so many factors so there never is 1 answer especially since Medicaid, even though it is a federal program, is adminstered by each state according to their state laws. Even though the home is exempt asset for Medicaid review, how the home is dealt w/after death via the state's MERP (Medicaid Estate Recovery Program) & in probate is super dependent on her state's death/estate laws. That why everybodys suggestion on getting good legal is spot-on.

My mom is in a NH, on Medicaid, and still has her empty home.For us it works, the decision was really doing a financial pro/con with her attorney a few years back and long discussions with a couple of Realtors. Her house is a modest but vintage home in a historic district with many much more expensive homes around it. It has foundation issues, so no FHA, would have to be cash or conventional. There are no real comps to draw from as the house is kinda unique. The historic part is a big issue as any real renovation that affects the exterior has to get a certificate of appropriateness. The realtors felt it would be a long time on market and the costs to get it ready (staging, some painting, etc) and have it looking tip-tip 24/7 for an extended period would cost quite a bit & $ was better spent on her being in IL & doing spend down on dental and other health related needs. Now her gerontology group docs are affiliated with NH's who take Medicaid so we knew that we could probably get her into those NH when she needed a higher level of care beyond IL or AL. And that's what we did. I & another family member pay for all on the home and under my mom's state Medicaid MERP guidelines all expenses paid by family or others on the home, like taxes, insurance, maintenance, titles, etc are deducted from her MERP tally. Upon her death, we will let MERP know that we will file a claim against the estate for all expenses. My mom is in her 90's so probability wise, we should not have decades of her house expenses, so that was a factor.
What's great about having legal do this as it removes the emotion from all.

I'd really suggest you have a heart to heart talk with a couple of Realtors to find out what the likely scenario is for selling the house, what the comps are and days on market, what you need to do to do and spend to have it market ready, and what the seller may have to contribute to. If you're in a big foreclosure state, there is alot of competition out there. Not all Realtors are the same, I'd speak with 3 who actively close deals in your mom's zip code. Good luck.

If she 'intends' to return to her home my understanding is that it cannot be factored into when and if she receives Medicaid. The home is a protected asset. However, there are several factors to being allowed to stay in AL rather than a nursing home. If she cannot attend to several key needs of her own I thought she could no longer live in AL.
My MIL has been in a nursing home for several years, as forced by my BIL. He sold off all her stuff and house after my FIL passed away. She fell - 2x - and broke her hip. This was 3 years ago. I think he thought she would die soon, which she did not. She and my deceased FIL deeded their home with joint ownership between my MIL, FIL, BIL and my husband about twenty years ago. I do not think they got a lawyer to advise them. The house sold for about $90,000. We paid capital gains on it as did my BIL. My MIL is still alive in a horrible place and mentally well, although physically struggling. It has been very difficult to see her be depressed in such a bad environment, but she have my BIL full rights to put her there. I can't see how anybody won here. Seems to me keeping the house and getting her into a place that can deal with her issues protects everybody. It also gives her some hope as long as she knows the family home is still intact.

Hannah44, it sounds like you have a great situation, and selling the house to keep Mom there makes a lot of sense. WIth a little guidance to do it in the most advantageous way al should be well!

Thanks, aberry. Another helpful suggestion.

Ask the place she is living in, if they have any assistance in helping pay rent. I found out my mom in laws place did, but she had to be living there for so long. We could not afford the $3,000 monthly and she only has her medicare which is not much..and has other bills also. Does not hurt to ask and if they do, fill out the paperwork and write a letter stating how much she makes, what if any the family can give etc...it is worth a try

Thanks, jeannegibbs. I am going to seek out an Elder Law Attorney in my area. You raise a good question about dementia progression. Yes, she will be able to stay there and at the same rate! We looked long and hard to get a good place with future care in mind. This residence only has ten clients and has 24/7 staffing and an RN on call. The nursing director is also the daughter of one of mom's neighbors so there is a connection there. Thanks for the compliment, too. We work hard every day to make her life at this stage as pleasant as possible. We don't want to sell her house be see no other alternative at this point. I'm sure an attorney in this field will be able to provide us with answers to all our questions.

I think I'd disregard the neighbor's report of what her lawyer said. Consult your own lawyer who will advise you based on your mother's particular circumstances.

Will Mother be able to stay at this ALF as the dementia progresses? Do they have a memory care unit? If she needs increasing levels of care, will the cost rise, too?

Your mother is very lucky to be able to pay her own way through a very long life! (And I know that lots more is involved besides luck.) She is also lucky to have caring daughters looking after her best interests.

Selling the house makes sense to me, but I'd certainly want some Elder Law guidance.

WOW, mstacks, thanks for the info. I will be passing this along to my sister and brothers. We don't want to make a mistakes that will impact her and us in the future.

Yes it does make sense. The rules and regs of Medicare are sooooooo techinical. You need not just an attorney, but an "Elderlaw" attorney who specializes in us "older generation" and the headaches we encounter in situations like yours. Remember that once you spend down that house money she may have to meet Medicare/Medicaid eligibility regs on income and assets. And while I don't know the current rules off hand, I do know there are several years that count and are affected by any major "disposistion of assets" within a certain time frame PRIOR to the application.

We had to keep my FIL at home over four years longer than we intended just because of the value of the land he deeded to each family THREE YEARS PREVIOUSLY that still counted toward his assets as of the date of the nursing home application. PLEASE see an Elderlaw attorney before you do anything.

Thank you jeannegibbs. I knew about spending down for Medicaid but she kept saying "Medicare" which totally confused me. My mom will be 91 in October. She has moderate dementia and congestive heart failure. Although she's not at the house my sister goes and takes care of the lawn, bills, etc. and we also use it when we have out-of-town guests. We calculate that she will have 4 more years if we get the price that has been suggested by the realtor. We've asked the facility director about what happens when she has no more money and the answer is they don't accept any government funding. If mom lives beyond her money she would have to move out unless the director would accept her SS check only. Right now we are pulling from two investment accounts and couple that with her SS check to meet all her expenses. One thought we had about "Medicare" is if a capital gain is reported she would probably have to pay more for her Medicare coverage and pay higher taxes for the year in which the house sells. My sister does file her taxes for her so she is asking her tax consultant about this.

I think you mean Medicaid, not Medicare. Medicaid recipients are allowed to own a house, so you don't have to sell it for Mom to be eligible. That is probably what your neighbor is referring to. Whether it makes sense to sell now or not is another question. If she sells the house she won't be eligible for Medicaid until she has used the money up, for example, by paying for the ALF. She cannot give any of the money away.

If you sell the house, how many more months will your mother be able to afford at the ALF?

Does the AL facility accept Medicaid from residents who have been private pay for a certain length of time? Or will Mother have to move when her money runs out? (Many care centers that do not accept Medicaid for new residents do from residents who have been private pay for a certain length of time, such as 3 years. Find out what the policy is where Mom lives.)

Is the house sitting empty now?

I think you need to do what Mom's neighbor did ... see an attorney who specialized in Elder Law and who can advice you on the options available.