All that’s left of us is my sister, my aunt, and me.
Right now, our immediate concern is losing the family house she’s in, which is a possible source of income towards her care by renting it out. We don’t want to find out later that we could have hung on to it if we had done something sooner.
We just found out she has dementia brought on by covid (only 66yrs old 😔) and things are moving FAST.
Obviously, her care is top priority, but we’re going to need the income this house can generate if we’re going to pull this off.
I’m afraid the state will seize it to pay for her care, but that would only cover 2-3yrs, from what I understand. Medicaid is only good for 2yrs, according to a Google search. Then she’ll be evicted and homeless??? 😧
I’m so lost it’s nauseating. 😖
Thank you for your time.
kelly
22 Answers
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You have OBVIOUSLY never been blindsided by a family crisis and said things that came out wrong. She was worried that Aunt would be kicked out of NH after 2 years and be homeless. She is new to the situation and is finding out home much she doesn't know, just like many of us that have faced these situations, cut her brake already.
Going into a home with money widens quality options. The quality options that accept Medicaid generally prefer clients with a history of private pay as opposed to the few that generally accept everyone.
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You will not make enough money from renting to pay for care. Sell the house and use the proceeds to pay for care. When the money runs out apply for Medicaid.
“FMV” tends to default to current tax assessor value.
AND can become a real problem if the elder has owned the property forever, as it likely has had a ceiling on its property taxes due to its homestead exemption and what ever over 65 elderly / disabled exemptions. So elderly MeMaws annual property taxes quite low and set. If elder fixes the place up or just let decades delayed maintenance happen, doesn’t matter as taxes set. Meanwhile in most areas of the US, every year it’s assessment increased as houses all around them have been sold, or renovated, or torn down & new build, or flipped…… so the comparables on MeMaws house are way way waaaaaay off. That her property assessment is whack, doesn’t matter as their taxes are back from 1999 or 2009 or whenever they hit that sweet spot on taxes. So Memaws 1800 sq ft 2BR 2BA Ft house that’s old unrenovated with vintage plumbing has as its comps the renovated next door 1800 sq Ft 2BR 2 BA house with granite countertops, rainfall shower heads, modern kitchen and everything to 2021 code that sold for 325K. So trying to sell old house maybe worth 150k at the FMV of 325k not going to be easy. But that’s what Medicaid likely wants it to sell for.
My point is, it’s really important to make sure that property taxes are accurate to what the property actually is and if not, file do the annual protest that all taxing districts have.
That her home is in Michigan & that MIchigan allows for Lady Bird Deeds is a rare gift that I think the 3 of you should explore with a MI elder law atty and take into account all Aunties financials to see just how long possible it will be till she runs out of her own $ to pay for private pay care whether in her home or in a facility. And plan that either you or Sis can and will move up to MI FT to caregiver for her either to do in home care once she has run out of $ or do it now to have her $ paid for caregivers s..t..r…e..t..c…h out longer.
At a minimum, one of you Sisters need to be there living with her FT at the beginning of this journey. Long Covid is such an unknown, she could be fine in her home with you or Sissy as a companion / caregiver. And be fine for years. We have a friend with long Covid, his executive functioning is gone so he has had to retire but still ok to drive and shop but not able to deal with numbers. Your Aunt could be ok in her home with you around; she’s just 66, it’s so young (most of us answering you on this site are over 66 btw!) Someone needs to go with her to her MD visits and make sure she’s doing her meds and therapy on schedule.
You cannot put any of this on autopilot. & neither can you think that renting the house and dealing with renters - even if it’s fully renovated and looks cute - can be put on autopilot. Please heed the advice posted on others experience in renting….. it’s accurate!
if you & Sissy & Auntie want to keep the place, then all 3 of you need to commit to do whatever to make it happen and be able to use the rare advantage MI Lady Bird deed allows for. You do not yourself have $, but you have your own person to be there and do, which is priceless. Best of luck in all the decision making in the future.
Here 's an option. If you want the family house, then buy it at market value so that she can have good and enriching AL care until she applies for Medicaid.
Your Google search is completely wrong. If all she has is the house and she needs full time care, she can stay there and receive in home care of a few hours a week but you will have to provide the rest. Or she goes in a SNF, someone who lives in the house pays all taxes and upkeep until she passes. After that there will be a lein on the house which will be satisfied upon the sale balanced to the cost of her care. Which means someone will still have to purchase the house.
Their mom died after only 3 years at 95. That was about as long as this was sustainable.
Your aunt is three decades younger. Unless both of you want to assume the hands on yourself for her for life, there is no “family home” for you two to inherit.
Imagine if it was for life and people got back on their feet, earning 200k annually and getting taxpayer funded Medicaid? Yeah, not good.
I remember the panic you are feeling all to well. First, breathe! Second, Breathe! Thirdly, get on the phone to agencies local to your Aunt. Area on Aging, county counsel on aging, those searches should direct you to whom to call. They will have lists of the local resources and contact information they will email to you.
Do NOT go rushing half way across the country without some information to help you when you get there.
The hardest thing I learned was that people can be dangerous to themselves and others (passively) and you can not do a thing about it, unless the person has been declared incompetent by a court of law. So you can't force her to do anything. Are you able to speak with her doctor and find out if he would testify that she isn't competent? That's the 1st step, a court requires 2 doctors to say someone is not competent, because taking away someone's autonomy is a BIG deal and not an easy prove.
If you are prepared to be her live in caregiver, in a state you don't live in for 5 years, you can probably save the house, if you can get her to do a deed transfer based on MI law. If not, that ship has sailed.
Medicaid won't take her house but, they will require that she pays all of her monthly income as her share of costs minus about 60 bucks for personal needs, like depends, hair cuts, etc. So she will have no money to pay towards the house. Are you and your family prepared to pay for everything? Because renting it out could cause her to NOT qualify for Medicaid and ALL of the rent money would have to go towards her care, leaving you to pay for everything house anyway.
Sometimes we have to let go of houses to ensure our loved ones get the best care possible.
If you can get her into care, sell the house to pay for the best facility that accepts Medicaid and self pay until she qualifies to receive public assistance.
I would find out where you actually stand based on Michigan laws, then see if you can be proactive or just wait for the crisis that takes all of Aunties choices away.
Best of luck! Remember, Breathe!
Each State tends to be a little different in monthly income and assets allowed. In my State the assets allowed are 2k. The monthly income (SS and pension if one) cannot go over about $2300. I am just giving you the basics here so u have an idea. What you may want to do is look up Medicaid in her State and see if there is a booklet you can download explaining what her State allows. Then you can always call a Medicaid caseworker to explain things that you do not understand.
Assisted living is private pay. In some States, if you pay for at least 2 years in an AL you can apply for Medicaid. But, the AL has to except Medicaid. If Aunt is in the early stage, she may not qualify for Medicaid so an AL would be the choice. Her house can be sold (at Market Value) and the proceeds used to offset the cost of the AL. If ur State has the 2 yr private pay then apply for Medicaid and she has enough money for the house, she will be OK.
I would not rent. If she has Dementia, she will never be able to return to her house. It gets worse. Renting is a headache. Like said the Township has to OK it. A Certificate of Occupancy is needed each time a new tenant moves in. Painting and carpeting need to be done every so many years. Then there's the tenant...will they trash the place? You live too far away to keep an eye on it.
"I’M still trying just to save enough gas money to drive from Texas to Michigan to see my aunt! "
BUT
Before you do this, realize elder who goes onto LTC Medicaid who keeps their home - whether it’s purely owned by them, or on future to hopefully happen Lady Bird Deed, or Testamentary or other Trust, or titled in a Life Estate - the family / heirs will need to from their own wallet pay for & do whatever is needed on the property still in Aunts name for Aunties lifetime and probably 2 years post death and deal with the required attempt for State to do a recovery of costs paid via MERP. So once Aunt on LTC Medicaid, all property taxes, insurance, utilities, maintenance etc will be on you & Sister as auntie is required to have almost all her mo income plus rental income go as NH copay. Could be 3 year$ could be 13 year$$$$$. Long Covid is an unknown and Aunties young at 66.
If u have to save up to pay for gas to drive to MI, imo, u don’t have $ to afford her home for years.
If Aunt has a mortgage, personally I do NOT see keeping it as an option. Mortgage atop all usual property costs plus being out of state makes it too much $ & too unwieldy. If this is the case, imo, have her make you or Sis as POA so y’all can oversee selling it at FMV & hopefully while she is still in spenddown mode so that not filing LTC Medicaid application till years from now. All $ has to go for her care, no gifting!
Keeping a house in the family sounds great & can be done but imo You need to do clear eyed evaluation on her financials especially as to past 3 years property costs & what type of spend down she has to do. That means you & Sis get up to MI and go thru Aunties checkbook, bank records, bills, retirement info, etc to find out exactly what’s what. If it’s $10k a year thats way different than $35k yr. If house needs a new roof ($20k) & plumbing ($8K) to ever rent it, do you & Sis have the $ to do this plus regular costs and be there as needed to oversee repairs done? And costs never ever realistically affect your own living situation?
Not to sound all “EmpressIgloo”, but to me, having a family member keep their home while on LTC Medicaid is like having 2nd or 3rd home w/their costs & responsibilities BUT you do not yet actually own it so run risk that things may not over time go as planned. Most folks cannot afford a 2nd home & don’t like risk, so think about this. I’ve been on this forum a long time & what seems to happen is all fine for 6-8 mos, then prop tax bill comes & something bad $$$ happens at house & fam do not have time or $ or interest to deal w it.
If rented, this can get complicated. Prop insurance will need to change as no longer homeowner occupied. Prop taxes likely change too as homestead exemption revoked so increase & significantly. It has to be maintained to keep renters. City may tax on rental.
Rent is income so has IRS filing. Rental will need to have property ok for whatever regulations Aunties city requires on rentals (like no STR). You live in TX and unless your Sister lives nearby Auntie’s place, realistically need property management Co to oversee rental, payments, deal with all maintenance.
Should this all happen & rental income plus Aunties SS income not be enough to pay for her NH and Auntie has spent down all her other assets to 2k, only then Auntie can file for LTC Medicaid.
As Geaton posted, Auntie does need to be “at need” both financially and medically for LTC Medicaid.
I probably should have mentioned, the house has been paid off for decades. It was also completely renovated and restored from roof to basement one year ago, and in neutral "rental colors", because renting it out was a consideration at the time.
It’s been in the family for 70 years. We always had all our family birthdays and holidays there. It’s the only bit of home my sister and I have left.
The thought of it suddenly evaporating like this is absolutely heart-wrenching.
Good Luck.
MOBrien
BUT
what Medicaid can do & is required to attempt to do (due to Bush era DRA 2005) is place a lein or claim against the nonexempt assets of the Estate of the elder who was on LTC Medicaid or community based Medicaid if over age 55 to recoup costs paid. States do this via MERP. Totally on family or heirs to deal with; whether means submitting exclusion documentation or opening probate or doing legal to process a Lady Bird Deed or a Trust. If not, then in order to ever sell property, lien has be be resolved.
AND
for the now on LTC Medicaid elder to keep property, someone who is family or potential heir will have to pay prop costs till beyond elders death.
AS
Medicaid requires copay of almost all elders income paid to the facility. So no-none-nada of homeowner elders $ available.
AND
this is the rub…. Family / heirs may not be at all interested in paying & doing on MeMaws old house with decades of delayed maintenance for indefinite period of time. Or better yet, family is ok on this but 1 spouse is not. So if that sibling with the “not going to” spouse will not pay / help / do their % share, other siblings will have to. Yet nonparticipating sibling will still benefit their share as per the Lady Bird Deed, or Life Estate or will (should the heirs exemptions of exclusions and probate distribution be done in heirs favor). Family friction ensues…. House get sold; all $ family spent on house cannot be easily reimbursed as elder still 100% owner so looks like “gifting”.
Average NH stay is 2.5 years plus allow 2 yrs probate; it can be really hard to get heirs to pay & do for 4-5 years. Can be done, but in my experience, there needs to be $$$$ & fixed firm consensus by heirs on seeing this out whether 6 mo or 6 yrs. Hard to do.
If the OP really truly has to save up to even have $ to pay for gas to go from TX to MI, she cannot afford Aunties house in her present circumstances. If her Sister does have $ & is beyond willing to cover all costs and be ok on having the poorer OP benefiting from her $, then maybe getting a Lady Bird deed done and waiting & paying all till Auntie dies, may work.
Does happen. There was some1 on this forum who did this for her dependency-challenged Sister. Mom did TX Lady Bird Deed, House was rural, modest & paid off. Mom died 2+ years after being in NH on LTC Medicaid. Sister was a handful…. would go to vacant house w/friends, do drugs & paaarty; the Good Sister would then go, clean up, redo locks; her hubs helped, he was a saint but was running out of nice. Mom died, atty did paperwork for Lady Bird & MERP. House sold via Realtor, $ split 50/50 as per Deed. The good Sister was financially secure & viewed all this as a mitzvah. I don’t think most families would or could do this for years & years if need be. The generationally wealthy never deal w/Medicaid; the really low income don’t have property or assets to worry how to do estate planning. It’s the middle that does & flat have to have the $, time & sense of humor to ride it out however long it takes to make it work to keep the property. Will not ever be simple.
Medicaid does not seize houses. They put a lien on the house that needs to be satisfied when it is sold or changes owners.
Since Medicaid is a program run by each individual state, you should consult with a certified elder law attorney and a Medicaid Planner for her state for the MOST accurate information that will help you in your situation. This is a global forum with anonymous, non-attorney participants -- there are no consequences for people here giving you bad information that you act upon. Pay for accurate information or you'll pay a price for following bad advice.
FYI renting out a house usually requires that it is completely up to code and has additional insurance. Being a landlord means paying for or doing repairs in a timely manner, continuuing to pay for upkeep, property taxes, etc. If your Aunt goes into AL -- which can be at least $2K minimum per month -- the house may cost her (and you) to keep it. If she's making income from a house rental she won't qualify for Medicaid financially, even if she qualifies medically.
If I were in your shoes I'd pay to get accurate and smart guidance from the professionals. It will be a worthwhile investment.
They can also assist with document preparation if that is needed.
Enter into the search icon (the magnifying glass icon above in the navigation bar):
"Can Medicaid seize the home?"
here is an expert article:
"Can Medicaid Take a Senior’s House to Pay Their Nursing Home Bill?"
K. Gabriel Heiser: Medicaid Secrets | Updated April 21, 2022
Try to slow things down and do not panic.
If a move is imminent, start packing boxes, label them carefully.
Renting out a house is a lot of work and requires periodic injections of cash, which will be unavailable from someone on Medicaid. The depreciation expense deduction is less likely to be useful to someone on LTC Medicaid.
Read the articles on Medicaid on the site that hosts this forum. Then get the Nolo Press book on long term care (and maybe landlording) from the library. Then you can have a base from which to ask questions when you meet with the elder law attorney.
https://www.agingcare.com/topics/104/medicaid
Who wants to inherit and live in this house and how much work are they willing to commit to?
Renting- I was just going to hire a property manager, put the rent in an account, and pay for insurance, taxes, repairs, etc,… out of that account.
Anything left over would, of course, go towards making my aunt comfortable.
I just Googled that "fact" about the 2yrs. I’m that new at this. I’m standing on square #1 here. 😳
I know random Googling isn’t the best source, but there is sooo much information and so many websites, half of them contradicting each other, I don’t even know where to begin.
I also saw that elder law attorneys start at $250hr. Someone else told me it’s $5000 just to hire one.
I’M still trying just to save enough gas money to drive from Texas to Michigan to see my aunt!
She has the money for an attorney, but she still thinks there’s nothing wrong with her, even after wrecking 2 cars, pulverizing 2 mailboxes, and setting the kitchen on fire.