If my niece buys her house, we understand that she should pay market value. Are there any other concerns with regard to Medicaid? We understand that Medicaid will consider the asset and my sister will have to "pay down" the profit from the sale of her home. Any thoughts or suggestions?
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& that’s just what you know about, right?
Im going to put aside house drama as I think there’s something way way WAY more important lurking, which is her “Pending” status…
Just how was Sis - who has no POA- able to get application done to be “Medicaid Pending”? Is she competent & cognitive enough to have given all the info needed & documentation to accompany her LTC application? There’s time sensitive documents a caseworker must have to review & use 2 determine if she’s eligible. Usually 5 years of bank statements plus income and retirement info at a minimum. For my mom, it was over 100 pages that accompanied her LTC application. If Sissys application is missing items, usually a phone call & letter with items requested is sent, & if no response, Medicaid will find her ineligible. Does Medicaid have all items needed to get her application finalized? Medicaid may not be able to talk w you, as your not POA, but, there’s going to be correspondence either in her room or sent to her house that you can use to try to find the items needed, xerox them and get them to the caseworker. Anyone doing this?
Please realize if you or her daughter signed off to be responsible in any way in her admissions paperwork, the facility can go after you for her bill, should medicaid get denied. Also realize if Sis has checks (or big withdrawals for cash) made out to individuals and not businesses, that causes the caseworker to look to see if there are “gifting” issues.
Being “Pending” does not mean automatically eligible. Pending tends to be first 3 maybe 4/5 mo for caseworker to review required items, search State database, etc. Then determine eligibility. If ineligible, facility she is in will get the letter as well. They will do a “30 Day Notice” which basically means she moves out OR family signs a contract OR facility will contact APS to work with them to get an emergency “ward of the state” status done for her, so she will have a court appointed guardian who has legal authority to do whatever needed with her person, her assets (& her debts) to ensure she gets care, & State pays for her care. Ward sometime is the best path as the court appointed guardian can get things done (like deal w mortgage, file BK), plus they know what facilities are available statewide & get a placement done. They can do things that might would take you forever to deal with
If nobody has POA, & she cannot or will not do a POA to you, the only way you can get the authority needed would be for you to file to get guardianship. Guardianship is not a DIY and you will need to pay for an attorney to do the filing, etc. From a purely financial standpoint IMO doing guardianship on someone in LTC, facing foreclosure, 75k debt, and who knows what other debts else, does not make sense to do. Your Sister might could be well served by being made ward of the State.
I’d really encourage you & her daughter to be more concerned about & doing whatever to get her approved for LTC Medicaid and doing what you can to make sure Sis is paying her required copay ea mo to the MC over whether daughter can acquire that house in some way.
Medicaid will not take the home, they will place liens on it that become payable at her death or upon sale of the house. Better to sell it, at market value, spend it down then apply for Medicaid.
If the person is still in Medicaid Pending phase, like the OP Sister is, there not an action Medicaid can even take just yet. If house isn’t made current on mortgage in full within maybe 3 - 4 payment cycles, they will start foreclosure process, file Notices and get it all done ASAP as allowed by state law. And it gets resold to an investment group that already does business with this mortgage/ foreclosure group the same day or within days of foreclosure finalized. Medicaid kinda gets shut out.
Medicaid in some states have it so that the applicant can ask for their required mo. income copay (to the NH) to be 2 b waived so that they can use the $ to instead pay thier mortgage while the property is up for sale. Like TX Medicaid does this but you have to apply for the waiver. It seems to be time limited, like 6 mos. so your expected to sell it FMV via a Realtor within that period of time. It makes sense for states to do this as otherwise it gets foreclosed upon and unless it actually sells for way way over the mortgage, the old owner ends up with nothing. The mortgage holder, well it’s not to their advantage to keep holding into the property a minute longer than they need to or sell it a FMV. They need to get it moved off their books, sold at close to mortgage balance & sold like yesterday.
if OP Sis is delinquent to the point they are seeing foreclosure notices (which seems to b the case) or final demand letter, the mortgage co IMO has moved beyond working things out. There’s no Covid protections either as Sis no longer living at the home.
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On placement in a rehab facility, any idea what her “needs assessment” is like? That document is used to determine placement. Purely rehabilitation facilities are few & far between & those that have Medicaid beds even fewer. They seem to be geared for those that have major trauma, like bad auto accident or workmans comp accident and have break repairs / surgery but also have TBI so between all this they can benefit from multi month stay in a rehabilitation place as they probably will get better and be able to leave & go back & function in their community. What’s your Sisters prognosis?
If the house sits empty while all of this is going on, you need to get insurance that reflects the house is empty. Regular homeowners insurance WILL NOT cover a vacant property. Finding this out because you have a claim is no fun.
As Igloo stated, get a licensed appraiser to appraise the property. It is well worth the money on so many levels. It will help with financing, as well as the insurance coverage.
Speak with the SW at Medicaid and get the rules and procedures in writing. If you have to send an email that says, per our conversation I wanted to verify that I understood you correctly and repeat the conversation, at the end of it be specific and tell them that you would appreciate them replying to the email if you misunderstood anything. You must cya. Do not accept a phone call from them to change what you understood, send another email, if they try that route and say that you want to have it in writing to ensure that you are doing correctly.
I have to say that it is refreshing to hear that a family wants to work together and do it right. You all are an inspiration for others.
I am sorry that your mom is so ill and I hope this all works out well for all of you.
1. how Medicaid adminstrative code runs in your state
2. how Medicaid required attempt in estate recovery (MERP) intersects with state property laws and probate; & if an outside contractor is used
3. If your Sister aka you as POA & her daughter want to run the clock to acquire the property at a later point in time after Sis has died.
I’m assuming house has no mortgage or other securitized debt attached. If still a mortgage (horrors!), sell it & hopefully $ left over.
ALSO
I’m assuming that you are Sissys Dpoa. This is IMO important… your niece cannot be POA as things POA will be doing…. like $ spent or not spent on house …can be looked at as “self dealing” if she gets house.
But before all this realize Sis’s home is exempt asset for her lifetime is my understanding for Medicaid in all states. She or you as her dpoa will have to do some sort of right of return document annually for Medicaid and maybe also to for the local tax assessor/ collector (so homestead exemption and lower taxes stay in place). She does not have to sell the property to be on LTC Medicaid. Medicaid does require her to do basically all her monthly income as a copay to her NH. Due to copay, Sis has zero $ to pay property costs. So taxes, insurance, utilities, repairs, yada yada all fall to family to pay &/or do till an undetermined end point. Sis could live another 5 mos or 5 years and add on yr or 2 or so for probate & dealing with MERP, that’s what your wallet and sense of humor & actual transfer or property ownership will have to be willing to do IF home kept.
Home can remain empty (state administrative code may have some costs excluded from MERP if u keep records and file appropriately); home can be rented, personally I think this is sticky (like JoAnn posted) as rent is income for Medicaid; or a caretaker or property manager is appointed who stays there… this is what Alva is getting at in her post if I’m not mistaken. For this IMO you have to have an atty draw up for you not a DIY. If Sis keeps her home, ime you have to, like have to, be willing to ride it out till whenever so runs risk.
Im guessing niece will not want to run risk but wants ownership. If so, I’d suggest that you as POA get property inspected as a first; then that inspection report is given to an appraiser who uses it to help them base a fresh current appraisal on property. Both need to be licensed & registered w state as will have a seal on their reports. It’s a legal document too. Like I entered both into probate to establish asset value. So if it comes in at 125k but tax assessor has it at 189k, 125 is FMV. You can also use this should Sis assessed value be whack & her taxes are based on the higher & incorrect value. Right now Sis has exemptions so taxes are lower, but that will increase & probably dramatically for whomever buys it. You want to have assessed value to be accurate. Sis pays for this not daughter.
if niece wants to buy, I’d ask caseworker what is required for a sale… like if the property must be with a Realtor & MLS listing. Like some states will not allow a FSBO sale. Or if niece is OK on paying Appraisal value. Ask how Act of Sale must be done, by this I mean if the state will want all costs Medicaid paid for Sissys care to date to be taken from proceeds in order for Act of Sale to go thru. Some states allow for a proactive lien placement so this can be done. Get all in writing from caseworker. In writing!
if Sis delinquent on taxes, let those come out of Act of Sale proceeds.
Medicaid will not easily let u reimburse yourself for property costs you paid. Keep this in mind when u do stuff for the house.
Personally I’d keep it empty till a path / plan is determined. Find an atty to do documentation needed. But nobody moves in…. Yet. Good luck & let us know what happens. We do all learn from each other!
I think occupancy works if there already was a family member living in the home prior or the family member is disabled or themselves aged. Keeping it empty seems to be simplest.
It might be a good deal better to do something like the following. The niece and family move in and caretake the property; no rental. Simple exchange of caretaking and upkeep which will keep the insurance doable and so on. The family may need to kick in insurance fees on the home and so on and consider that "rental of a kind" as your Mom won't have funds enough to keep up her home. Then when your Mom passes the executor can sell the home to their niece after medicaid does the claw back (which may leave little in terms of sale price in the assets of the estate). Surely none of us here are attorneys that I know of. But have some small experiences here and there. For that reason I caution you to SEE A LAWYER to get straight what the repercussions are for Mom in such a sale, an elder law one who knows the laws in your own area. Best of luck.