Our 84 year old dad- a veteran - is no longer able to live independently in his house, so he will be moving in with one of my sisters. He lives on Social Security, has no savings/retirement/pension, and receives VA medical care as well as Medicare. His only asset is his house, worth $130K. How do we protect his only asset in the event he eventually needs assisted long term care?
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Short answer, the house must be sold at market value any difference would be considered a gift by Medicaid and subject to penalty.
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If she plans to modify her home (her assest) then she needs to finance that expense. Dad paying to live there should cover the mortgage or loan that will initially cover the cost. If you show him paying to improve her property you will get a penalty.
See an elder law specialist to help your sister with the contract for him living with her. If you think he may need to move into long term care, have you checked what the requirements are for a veterans facility?
Most importantly you need to keep all of his money, expenditures separate from anyone else. Let him pay his share but do not let him buy extravagant gifts or give large sums of money away, doing birthdays and Christmas presents are fine as long as they are reasonable.
Best of luck with having him in your sisters home. Remember to support her and give her as much help as you can, she is going to need it. Also, try not to criticize how she does things, caregiving is a hard trial and the last thing the boots on the ground sibling needs is constructive criticism.
so like gladimhere is telling you - its not a good idea.
if there is any way to get around this I would check with an elder law attorney to get advice. you don't want to go into this without thinking it all the way thru.
General question, not personally aimed at you Kentucky, I'm just startled by this thought: how does a veteran have no pension? What, none at all?
Ask your dad's doctor to certify that your dad needs the care contained in the draft PCA and then ask your state's Medicaid office to review it before it's implemented. If your dad's $130k is spent via the PCA and he then needs a level of care that can't be provided by family, he shouldn't have a Medicaid penalty and taxpayers will not be unnecessarily penalized, either. Having a PCA in place is also a good way to formally recognize what the sister caregiver is doing, which is too often forgotten by siblings who are able to continue their lives pretty much uninterrupted by the needs of their elderly parent. Best wishes.
I would like to add my experience regarding property value.... value is pegged to tax assessor / collector data which in turn is based on comps of recent sales. Often for our elder parents property it has years if not decades of delayed maintenance.... not up to current codes for electrical/ plumbing... does not have granite countertops & rainfall shower heads that are now standard for market ready homes..... house is chockablock full of old peoples stuff and not ever going to be cleverly staged for sale. House isn’t likely going to get what assessor value is. If house is in an area where lots of Reno flips are happening and yours is the untouched since the 70’s house you’ll be lucky to get 30% above land value. So trying to get “FMV” will be daunting, yet that is what Medicaid will be expecting.
To get past this, I’d suggest you get the property inspected and appraised. Both done by state licensed professionals that place their seal on each document. If the appraisal comes in substantially under assessor value, and you sell it for that, Medicaid has to accept it. Appraisal is a legal document, like it can be entered for probate to establish value of assets even if assessor has it coming in way higher. Appraisal is tailored to the specifics of the house not the generalities of the area. & btw Those free market value report done by a Realtor is NOT a legal document.
If you are not selling it via a Realtor & MLS listing but selling within family, having inspection and appraisal done will be worthwhile for all concerned.
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