Medicaid in our state generally goes by the assessor's value when considering the FMV of property owned by the person on Medicaid. However, if you believe the assessor value is too high, you can get two professional assessments and they will accept the average of that as the FMV. If there is a lot owed on the house--taxes, deferred, maintenance, etc.--grandson might be able to buy the house at the assessed value, with proceeds going for grandma's care. If there is a lot of repair and maintenance needed, however, he might not be able to get a mortgage until the bills are paid and the house is livable. I like Igloo's ideas, but it sounds complicated!
Yeah it’s definitely time consuming and involved and runs risk but if there already exists couple of years or more of tax liens, so much of the required wait time (to redeem and get a tax sale deed) has already happened. They are not having to do the assessor parcel research and have the $ to be possibly bidding on dozens of delinquent properties, They just have to find out about and deal with the filings on grans specific property and then have cash on hand to pay all the prior years tax sale redemption holder’s off and the courthouse fees on that specific property. It’s an unusual situation that they could take legit advantage on.
I did my first tax sale on house next to hubs house (special circumstances shout out, “let the lady have it” lol) as owner had left the country, house went abandoned; then he returned year 3 paid off his back taxes and I got amazing huge check. I didnt really realize how much the interest and fines were; serious bank. He was actually so grateful that we held the redemptions as we shuttered up the front so it didn’t look abandoned and looked out for it.
Just have to say...Medicaid does not put a lien on a house until the recipiant dies. At that time a recovery letter is sent out asking if there are any assets. Thats when the house is listed. The letter also asks if someone is residing there. This could be Community Spouse, family caregiver or a disabled chil, etc. A lien will be put on the house. If the person residing there can remain, its upon their death, selling of house or no longer living there the lien will need to be satisfied. I live in NJ and this is how my Moms recovery letter read.
No. A person in a nursing home cannot gift real estate or other assets to anyone unless they are wealthy enough to never need Medicaid. Medicaid does a 5-year look back period on gifting. Any "gifts" over $5,000 puts the person on Medicaid into a penalty period. They will pay for the nursing home but will come after your mother's house to recap their money. If her home was put into an Irrevocable Trust to her grandson and that was done more than five years ago, then it's an exempt asset. Medicaid is not free. A person is not left with assets to distribute among their family and heirs if Medicaid is paying for them to be in a care facility.
So a tax lien? Can u find recent tax bill & where property is in redemption process city / county does on tax liens? Does grandson love it & has a bit of cash & be ok on a year & 1/2 2 acquire?
If so, he might be able to do Tax Sale Deed & bypass Medicaid. If your not at all familiar w/ how tax collector/ assessor sale & liens run this is kinda in general how set up: - tax bill goes out Nov / Dec & due in full January, or can be divided into 2 -4 payments over year if you have exemptions. Most need bill paid in full June 30 otherwise delinquency w/interest (hefty like 18-29%) added on. - If not paid, gets placed on tax sale list for that year & sale held maybe end Aug or Sept. - tax sale list published in newspaper by name, parcel or PPIN. You need to look at old bill to make sure it’s the property you plan to bid on. Amount for tax sale will be unpaid taxes due (not delinquency… that comes up later) for that year only. - sale in person at courthouse or online. You have to preregister & usually pay $ in advance that will cover what you want to bid plus add 20%. So if taxes $876.54, he’d put up $1100 in bid account. If not winning bidder, assessor sends a check for bid $ in 3-6 weeks. - so he bids when parcel comes up. If your area still does in person bids, he yells out “special circumstances” request. He stands up & tells why…. “My grannies, i buried my dog there”, yada yada. Some1 shouts let him have it, it gets 2nd & he gets a tax sale redemption for taxes due that year plus pays administrative fee. If it’s on-line he has to rebid ea time someone out bids him, no special circumstances opportunity. - his tax sale redemption gives him legal standing in acquiring house. - here’s the sticky part, if others have bid on prior years, they too have their own tax sale redemption ability BUT and to me this is important… - most do tax sales to make interest + back taxes $ paid when eventually owner pays or someone holding a redemption actually wants property. I’ve done tax sales; ime most do not at all want POS house or deal w/its tenants or upkeep, they want $ from interest & taxes. They do not redeem. - full redemption can happen after 3 years plus 6-8 months into 4th yr b4 before redeemed (transferred) via a Tax sale Deed for most places - this is why y’all need to find out where it stands in redemption cycle. If up for sale in 2021, 2020, 2019, it likely can be fully redeemed now over summer by anyone who pays off yr 1-3 interest & fees. But if just got 2 yrs, needs another yr then 6-8 mos to be redeemed. He wants 2 b winning bidder for year 3 as this way he just has to buy out year 1 & year 2. - should he get Tax Sale Deed, he can record it at courthouse& property is then in his name.
Grannie being on Medicaid & continuing to be owner is allowed by Medicaid. But assessor can legally sell her property if delinquent on taxes. As long as tax sale follows required notifications, whomever redeems it in full becomes owner. Medicaid lein doesn’t carry over as its unsecured lien attached to person who owns property & not recoverable till after their death (it’s Estate Recovery not “Still Alive Recovery” lol). Now to get around title concerns, he could do a Quiet Title Action. Quiet is a series of Notices to provide a way for anyone who has interest to notify atty for owner as to this and provide justification as to why and in a narrow period of time. Really ime doesn’t happen.
Quiet abt $1500. Atty I’ve used (I do raw land redemptions) does site selection clearance for developers w/Quiet on the side. Takes 6 -8 mo. Afterwards totally yours w no clouds on title. There is risk & time factor but $ to do this way less than ever FMV buying it. This might be a way to approach ownership if hes “game on” for it.
The grandson would likely just be increasing the the value of the home for the state. The state likely has a lien on the home and will seek the asset to recover the Medicaid cost of your mother's Medicaid. Check with CELA. TO BE SURE.
definitely, as long as property is in grandmother’s name nothing should be done that would increase its property value. In general it is not in family’s favor to fix it up.
If it’s really got decades of delayed maintenance plus hefty tax liens, it probably cannot be sold anywhere close to what the tax assessor has as its FMV. Medicaid tends to take the assessor value as the $ amount it needs to be sold for. If the grandson were to buy it for less than FMV, it opens up “gifting” issues for Medicaid.
Also for old rundown homes once Medicaid involved is that the $ that family or heirs spend to have utilities on, do some sprucing up on the place, get yard cut, etc to have it listed cannot be easily reimbursed from the Act of Sale $. House is in Grans name, so it’s all her $. It looks like gifting, unless you have a Memo or Agreement on property costs with your parent that you can attach to the proceeds.
I would speak with her Medicaid social worker BEFORE doing this.
She could very well lose her Medicaid by gifting her house to anyone.
It is only an exempt asset because she owns it and someone told Medicaid that she intends to eventually move back in. If not, the house needs to be sold at fair market value and the money used solely for mom and her care.
I WOULD NOT listen to anyone on an anonymous forum with something as vital as getting this right, go to the source.
10 Answers
Helpful Newest
First Oldest
First
I did my first tax sale on house next to hubs house (special circumstances shout out, “let the lady have it” lol) as owner had left the country, house went abandoned; then he returned year 3 paid off his back taxes and I got amazing huge check. I didnt really realize how much the interest and fines were; serious bank. He was actually so grateful that we held the redemptions as we shuttered up the front so it didn’t look abandoned and looked out for it.
ADVERTISEMENT
Medicaid does a 5-year look back period on gifting. Any "gifts" over $5,000 puts the person on Medicaid into a penalty period. They will pay for the nursing home but will come after your mother's house to recap their money.
If her home was put into an Irrevocable Trust to her grandson and that was done more than five years ago, then it's an exempt asset.
Medicaid is not free. A person is not left with assets to distribute among their family and heirs if Medicaid is paying for them to be in a care facility.
If so, he might be able to do Tax Sale Deed & bypass Medicaid. If your not at all familiar w/ how tax collector/ assessor sale & liens run this is kinda in general how set up:
- tax bill goes out Nov / Dec & due in full January, or can be divided into 2 -4 payments over year if you have exemptions. Most need bill paid in full June 30 otherwise delinquency w/interest (hefty like 18-29%) added on.
- If not paid, gets placed on tax sale list for that year & sale held maybe end Aug or Sept.
- tax sale list published in newspaper by name, parcel or PPIN. You need to look at old bill to make sure it’s the property you plan to bid on. Amount for tax sale will be unpaid taxes due (not delinquency… that comes up later) for that year only.
- sale in person at courthouse or online. You have to preregister & usually pay $ in advance that will cover what you want to bid plus add 20%. So if taxes $876.54, he’d put up $1100 in bid account. If not winning bidder, assessor sends a check for bid $ in 3-6 weeks.
- so he bids when parcel comes up. If your area still does in person bids, he yells out “special circumstances” request. He stands up & tells why…. “My grannies, i buried my dog there”, yada yada. Some1 shouts let him have it, it gets 2nd & he gets a tax sale redemption for taxes due that year plus pays administrative fee. If it’s on-line he has to rebid ea time someone out bids him, no special circumstances opportunity.
- his tax sale redemption gives him legal standing in acquiring house.
- here’s the sticky part, if others have bid on prior years, they too have their own tax sale redemption ability
BUT and to me this is important…
- most do tax sales to make interest + back taxes $ paid when eventually owner pays or someone holding a redemption actually wants property. I’ve done tax sales; ime most do not at all want POS house or deal w/its tenants or upkeep, they want $ from interest & taxes. They do not redeem.
- full redemption can happen after 3 years plus 6-8 months into 4th yr b4 before redeemed (transferred) via a Tax sale Deed for most places
- this is why y’all need to find out where it stands in redemption cycle. If up for sale in 2021, 2020, 2019, it likely can be fully redeemed now over summer by anyone who pays off yr 1-3 interest & fees. But if just got 2 yrs, needs another yr then 6-8 mos to be redeemed. He wants 2 b winning bidder for year 3 as this way he just has to buy out year 1 & year 2.
- should he get Tax Sale Deed, he can record it at courthouse& property is then in his name.
Grannie being on Medicaid & continuing to be owner is allowed by Medicaid. But assessor can legally sell her property if delinquent on taxes. As long as tax sale follows required notifications, whomever redeems it in full becomes owner. Medicaid lein doesn’t carry over as its unsecured lien attached to person who owns property & not recoverable till after their death (it’s Estate Recovery not “Still Alive Recovery” lol).
Now to get around title concerns, he could do a Quiet Title Action. Quiet is a series of Notices to provide a way for anyone who has interest to notify atty for owner as to this and provide justification as to why and in a narrow period of time. Really ime doesn’t happen.
Quiet abt $1500. Atty I’ve used (I do raw land redemptions) does site selection clearance for developers w/Quiet on the side. Takes 6 -8 mo. Afterwards totally yours w no clouds on title. There is risk & time factor but $ to do this way less than ever FMV buying it. This might be a way to approach ownership if hes “game on” for it.
Also for old rundown homes once Medicaid involved is that the $ that family or heirs spend to have utilities on, do some sprucing up on the place, get yard cut, etc to have it listed cannot be easily reimbursed from the Act of Sale $. House is in Grans name, so it’s all her $. It looks like gifting, unless you have a Memo or Agreement on property costs with your parent that you can attach to the proceeds.
She could very well lose her Medicaid by gifting her house to anyone.
It is only an exempt asset because she owns it and someone told Medicaid that she intends to eventually move back in. If not, the house needs to be sold at fair market value and the money used solely for mom and her care.
I WOULD NOT listen to anyone on an anonymous forum with something as vital as getting this right, go to the source.