My husband and his sister co-own their childhood home in Memphis TN. In Tennessee TnCare Choices would care for Nancy until she went to long term care and then take the house which we are happy to let go. There are many repairs we will never be able to afford to do. Since she now is living in DeSoto county with our daughter we need to find out if Ms Medicaid would be able to do the same thing even though it is in Tennessee. If Norman got a quit claim deed in his name would that cause Nancy to be disqualified for Medicaid because it could be construed as selling assets.
& problems beyond MedicAID..... & yes you are right that Medicaid looks at a QCD from Nancy to Norm as Nancy gifting her 50% ownership to Norm and can place a transfer penalty to Nancy’s application. Transfer penalties are NOT straightforward math problem of $gifted=penalty$ to be private paid. Actually more an equation of $ gifted (defaults to tax assessor value which may be whack & why getting appraisal is mucho importante as you can use the done with a seal legal appraisal to rebut assessors value) divided by your states Medicaid daily room & board daily reimbursement rate + a penalty factor (this not done in all states but it’s kinda like a small service charge, like .5% or 2%), which gives # of days Nancy ineligible for LTC Medicaid. # of days! & NH can bill at thier private pay rate and not the lower Medicaid reimbursement rate.
Again # of days ineligiblity. For states w/low daily R&B reimbursement rate, it can be yr + of ineligiblity. Example, House $75k in a state that pays $150 R&B = 500 days of ineligiblity. But state that pays $325 R&B = 230 days ineligiblity. That NH they are already in (as they have to be in a NH before they can apply for LTC Medicaid) has a bill from Day 1 that NH will seek payment for from Nancy or family or anyone they can find. As Medicaid can take 3 or more months to process (my moms took 5.5 mos in TX), Nancy could have big bill outstanding even with subtracting Nancy’s SS$ paid each month to NH.
If NH cannot get family to pay the outstanding bill, & if their especially ruthless, they might can file for a judgement w/a lien on Nancy’s property or seek to have her made a ward of the state so state appointed guardian takes over her life & assets so the guardian sees that NH gets paid. Transfer penalty stuff snowballs, you want to avoid going there imho.
MS, I’ll bet (I’m in New Orleans), has a low reimbursement rate; MS has the lowest national unemployment rate at $235 week (LA is $248), so it would follow MS going to have low Medicaid day rate. An elder law atty or Medicaid caseworker will know the exact R&B $ amount.
But back to Memphis house, this is a generational inherited house right? You want to get all paperwork on it & review. If it was done via a QCD by Norms parents, you want to know this now before trying to sell it. (So his folks place wasn’t transferred via probate order). The issue to me is that a QCD does not guarantee ownership; QCD transfers what person thinks they own, which may not be accurate. On generational, there could be lots of owners over time. It gets complicated. To guarantee ownership a property need to be conveyed via a Warranty Deed. WD involves a title search / title company with some type of title insurance attached. Yeah Norm can download a QCD form, fill it out & take the QCD to courthouse; CH will happily take the $ & file it; but it doesn’t guarantee ownership. So if buyer is needing to get a mortgage, most Mortgage co / banks nowadays won’t accept a QCD as there’s risk as no clear title. Better Mortgage Co are going to want a WD & if not one either won’t do lending or require deal as conventional mortgage (20-30% down, horrors!) or require Quiet Title Action done (Quiet not complicated but takes months for attorney to do postings so kills most sales). If you do anything on the Memphis property, please please have it drawn up as a Warranty Deed. Realtor will know real estate attorneys who do these & title companies as well. Cost is pretty low as WD are standard stuff.
I know it’s a lot to unpack, find & get organized but it’s good you are doing this now ahead of the inevitable crisis. Good luck.
They are 50/50 owners, right?
Nancy still has TN ID and mail going to her Memphis address, right?
& if you or Norman, your hubs, had to gather up 5 years of Nancys
banking, property and other financial records, the paperwork would show her old Memphis address, right?
That she has assets in and was a resident of the State of TN will be obvious should she apply for MS Medicaid.
Medicaid is administered by each state uniquely but under overall federal guidelines. MS is going to want her to be a bonafided resident of MS. Getting her a MS ID may be quite a challenge, you may want to call the Drivers license bureau (southhaven?) to see how feasible this is (we have friends w/kids at Ole Miss, the DL there is running 4+hr wait times). MS Medicaid, like all other states Medicaid programs, will have a fixed asset & income limit for eligibility. If this is about getting Nancy into a NH LTC facility to live in, her nonexempt assets would be a maximum of 2k. She can have a homestead property as an exempt asset BUT and this is important, it has to be a MS homestead. That property in TN would be a nonexempt asset and it’s 50% value (probably based on the last tax assessor bill) would need to be sold and then that $ spent down till she’s at 2k. All roads lead back to Memphis from her paperwork & legal documents. luckily it’s a short drive!
Now some states will allow LTC eligibility for an applicant who has an out of state property that’s technically a nonexempt asset to be allow to exist IF it is placed on the market by a Realtor and property is under a MLS type of listing. So no FSBOwner nonsense. I don’t know if MS does this, it would be something to speak with an Elder law attorney about or get an answer in writing from a medicaid caseworker on how this is done. But realize that from day 1 of LTC Medicaid, Nancy will essentially have zero of her old income (like her SS) to be able to pay a penny on property costs as Medicaid requires Nancy to do a copay of all her income less $50 each month to the NH.
If her moving back to TN and going onto TN LTC Medicaid is really not the plan as you want her close to family, heres my suggestion:
- find Realtor who sells in the old neighborhood. Maybe speak with 2 or 3, then Norm & you go up and select 1. Y’all are motivated sellers.
- they get house inspected & appraised. If house actual value is way way less than tax assessor has, getting appraisal is super important.
- property needs to sell within 10/15% of the appraised value. Again important as Medicaid is a stickler for house sold at “market value”
- Norm & Nancy each pay thier 50/50 of the costs on these & on getting yard cut and paying utilities to keep stuff on while listed.
- if stuff needs to haul out, draft family to drive up and do this ASAP.
Goal is get it sold 60 days. (I assume Nancy can still sign paperwork.) Hopefully daughter can caregive for her till October. I’m guessing Nancy - as house has lots of delayed maintenance, repairs - really doesn’t have any extra $ left once she pays for her 50% of house costs, if so daughter has to kinda caregive for free.
medicaid will look at House sale $ as being 50% Nancy’s as she’s 50% owner. She cannot gift $ to others. She cannot easily reimburse you for $ you pay on her share of the house. Medicaid tends to look at whatever we do for our parents or family as stuff we do for free or out of a sense of familial duty and without compensation. Unless there is a prior existing agreement to do this..... and notarized before $ started getting spent & repaid. House sale price is reported do states will know.
if realtor tells you that there simply are things that have to get fixed before it can get placed on the market, post that as folks on this site will have suggestions as to how to possibly deal with this. “As is” rarely holds true.