I am currently the main caregiver of my parents and I have POAs. My mom is in an ALF and on LTC waiver with Medicaid. My dad is still living with me and my sister taking turns since he can no longer live alone without mom at the house. I have parents house for sale. I can't keep maintaining it and paying for mom's ALF portion that Medicaid does not cover. I have seen several attorney's to get advice on what to do with selling of the house. I am on the deed as a Life Estate along with parents. If I sell the house I know Medicaid is going to look at that as income because of the 5 yr look back period. I need the income from sale of house to use for their medical expenses and ALF care. Right now I can't put dad in ALF because I don't have enough to cover for 2 parents on the social security they get combined and still taking care of their house that I am having hard time selling. I've seen several elder attorneys and each have given me different scenarios that made no sense to me and only confused me more and left me with a sense of they weren't sure what to do either yet they are an elder attorney. Anyways, I am thinking the best thing to do is put the income of sale of house if and when it happens in a trust, but which kind of trust? there are several from what I have read.... I just want to know that the money will go to their ALF care for as long as it can and that their Medicaid LTC waiver will not get taken away. Can anyone shed some light on this? It seems quite tricky. Also does me being on the life estate of their house really mean anything since they are both still living ? I'm guessing not. Appreciate any feedback. BTW, this is all taking place in FL.
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When providing a client with the technical legal information needed to make long-term care decisions, the view of the Elder Law Attorney is toward protecting quality of life with the assets and resources that are available.
Try approaching your advisors with definite statements about what you have decided to do next. Decision making is difficult in the midst of declining health. Try to give the advisor a definite understanding of what you and your family want to do.
If you have decided to move your father to assisted living, the Elder Law Attorney can determine the deficit between the monthly rent and your parents' monthly income.
If you have decided to sell the house, consultation with a Real Estate Broker can determine how much the market will give you in sale proceeds. That can provide basis for a projection of how long the money will last to cover the monthly deficits.
You mentioned that you are a remainder owner of the property. That fact can determine whether, or how much, capital gains tax must be paid on the sale proceeds. Have the Elder Law Attorney advise you on the real estate closing. It may still be possible to get a full Principal Residence Exclusion from any capital gain if you rearrange the ownership of the house before it is sold.
Elder Law Attorneys must be able to understand the progressing care needs of clients. Without this perspective, Medicaid planning and efforts to protect or set aside assets are, at best, incomplete.
At worst, asset-protection advice without a sound understanding of clients' needs can cause the family to misunderstand how financial resources and care programs in your state can be coordinated to prevent a nursing home admission.
https://www.irs.gov/pub/irs-pdf/p523.pdf
26 U.S. Code § 121.Exclusion of gain from sale of principal residence
https://www.law.cornell.edu/uscode/text/26/121
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