Hubby and I moved in with mom a year and a half ago and I am her caregiver. She currently does NOT need skilled care but as her health is getting worse, she might in a year or two. Mom's house is PAID OFF currently.
Here is what we want to do...
Hubby and I want to buy a property about an hour away in a bigger town and bring mom with us, either living in the same house or her own house next to us. The thought was hubby and I would buy the house with a mortgage, get moved, then eventually sell mom's house and use that money to pay off the new mortgage. The only difference now is that mom's name wouldn't be on the new property.
She's essentially moving her paid house to ALL of our paid house. How would that impact Medicaid should she need it in the future?
See an elder law attorney for options.
Moving in the direction you suggest would make mom self paying only if in need of care and you cannot tell at a second's notice if in facility care is needed.
Do not consider doing what you are suggesting.
This would be "gifting" on your mother's part to such an extent that she would never get help for her care from any governmental program. You may think she won't need it. But think again. She well may need it even WITH all the proceeds from sale of her home.
You badly need the advice of a competent elder law attorney in your area, not the many opinions of a forum, friends or neighbors. It's clear you don't know the drastic circumstances this could lead to that you cannot take back nor do over. Don't do this without seeing an attorney first.
Your Mom really should save the money from the sale of her house to use later for a really nice Assisted Living that also allows Medicaid after one has been self-paid in AL for a certain amount of time.
Time to set up an appointment with an Elder Law Attorney to guide you through this process.
Medicaid has a 5 year lookback, using her money to pay for your house is gifting.
You need to pay for your house yourself and leave her money to care for her.
Have a consultation with any attorney, IMO that is the best option.
Not necessarily. If the mother buys the property and it's put into Trust that's a protected asset.
Why shouldn't the little guy in the middle class not do what wealthy people have done forever? Rich millionaires and billionaires put everything into Trusts for their families. This is how they save on paying taxes and get things for free.
Why is the small, middle-class person with a little bit of money and maybe a piece of real estate, supposed to set the example of honesty and financial morality?
Please.
As others have correctly pointed out, most states' Medicaid "look back" on the financial application is 5 years. Medicaid covers the medical part of LTC (and SS covers the custodial).
You don't say how old your Mom is. A good financial planner would consider the longevity and health history of her family as part of forecasting probable needs. If your Mom is fairly old (80+) then I personally would be a little nervous without the guidance of an good financial consultant or at least a Medicaid Planner for her home state, which you do not mention. Medicaid rules vary by state.
Don't buy a property and have her name on the deed. Let her contribute to it financially if she wants to. Keep her name off the deeds and keep her out of a care facility for five years. That's the Medicaid look-back period. If she transfers assets over to her family now and you keep her out of a care facility for five years, those assets will be Medicaid-exempt and they will pay for her in residential care.
Or she can buy a property with you and put it into Trust with you as the Trustee. This means even if she has to go into a residential care facility, the property is a protected asset for as long as you don't sell it and if she's low-income and meets Medicaid requirements, they will pay.
If you sell mom's house and use the proceeds to pay off YOUR house, I believe that would be seen as her "gifting" the money to you. That is a no-no.
You would be better off to buy the new house in her name, with a transfer-on-death deed to you. She is allowed under medicaid qualification rules to keep her full time residence. As well as a vehicle and a limited amount of cash in the bank. They will not force her to sell her house and car if she is using them.
As others have pointed out, Medicaid has a 5 year look back period. So, if you don't expect to need to apply for medicaid for 5 years, then you only have the IRS to worry about by having your mother "gift" you a house. Yes, there's going to be a lot of taxes on that.
Sounds to me like you are selfishly thinking of how you can use your mother's money now to enrich your life, without waiting for her to die or spend all "your" money on her own health care.
I find it funny you spin it in this way: "She's essentially moving her paid house to ALL of our paid house", except that "her name wouldn't be on the new property"!
If you really want to buy a house together with mom, put all three of you on the deed, and you better plan on contributing an equal portion to pay for it. Even if that means you carry a mortgage, and mom's extra money sits in the bank, for HER use. That is actually not a bad idea. She still contributes to the cost of a new home for all of you, maybe in a more desirable community, and she has her family with her to the end.
You know, your mother can pay you as a caregiver. But I would put it in a written contract and make sure employment taxes are paid and income tax is withheld. Cover all your legal bases.
I'm also updating the house as much as I can afford to make it senior friendly doing it all myself. I do all the shopping, cleaning, laundry and food prep. Why? So she doesn't have to spend HER money. So she can keep as much as possible in case she needs to fall back on it.
So yeah, I think you read that wrong. Thanks for your reply.
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