How to remove a spouse on Medicaid from the mortgage and deed?

Medicaid is going to want their money back, best to avoid any thoughts of getting out of paying them back.

If you have the usual mortgage situation, that is secured lending done by the husband and wife with the property used as collateral for the loan. There would likely be a Warranty Deed / Deed of Trust recorded (filed) at the courthouse that states all this in detail.

Until the mortgage is completely paid off as per the terms in the mortgage paperwork & Warranty Deed recorded, you do not actually own the home outright to be able to do full legal changes to property ownership. You cannot sell or transfer the property. To do that, a Release of the Deed of Trust from the mortgage holder to you & wife will be done and that gets filed at the courthouse. Once Release done & recorded, it’s totally yours… you can sell it, transfer the title to a buyer or give it to someone.

But right now as long as the mortgage still exists, you cannot.
Doing any sort of transfer of ownership can actually enable the mortgage holder to consider the mortgage agreement in default and they can “call in” the loan. If a call-in is done, usually means you have 60 days to pay off mortgage in full with whatever early payment penalty in the agreement. If you can’t pay it off, they can start a foreclosure. Please find the mortgage paperwork and go over it in detail. Take it with you when you meet with the CELA attorney.

A CS having a mortgage will show that you need CSRA or MMNA from your NH wife’s monthly income. The mortgage works in your favor!

Again CS / NH situation is way way more complicated. Your best off finding an experienced atty who understands how Medicaid runs in your state and for your & wife’s particular situation. You are not yourself expected to become impoverished, only your wife is. But how to best & legitimately establish that works for the 5 yr lookback and regulations for your state’s Medicaid eligibility and eventual attempt for estate recovery, is imo not ever a DIY for couples. Good luck to you & your bride in getting all this done.

Just addressing the issue of removing someone from a mortgage:

1.  You can't do that; only the mortgagee (mortgage holder) can, as it involves a release of someone who's committed to be responsible, presumably along with a spouse for payment of the mortgage.   Unless you have significant income to fully pay the mortgage obligations (including real estate taxes), I doubt that any mortgage company would agree to removal of one of the mortgagors (those who execute the mortgage and are responsible for payment.)

2.   A new deed would have to be prepared, executed and recorded at the county or whatever level of government agency that addresses real estate properties and recordings.    That wouldn't be a problem if item no. 1 didn't exist, but it does.

3.   You'd need to have a properly prepared:

     a.     Quit Claim Deed prepared by a real estate attorney; this would allow you, the spouse,  to quit claim your interest to your wife, henceforth removing ALL interest she would have in the real estate.   And ALL means all:  obligation to pay taxes included, as well as any RIGHTS to use the house for Medicaid application, as collateral, unless you paid off the interest she currently has by virtue of any contributions she's made over the years, especially  in mortgage and tax payments, leaving her with some financial assets of her own.

     b.     Your wife as the conveying spouse could also by Warranty Deed convey her interest to you, which would eliminate her interest in the property, and would not just remove her interest but transfer it to you as the remaining spouse.  ALL the mortgage, tax, maintenance, etc. obligations would then become your responsibility.   Your wife no longer would have vested interest to use the house as collateral.

Can you afford to maintain the house, mortgage, taxes, and everything else once your wife is financially and legally "out of the picture"?

4.    If these actions were taken by you, as the spouse who would remain obligated, and if the mortgagee (lender) didn't concur, you'd very likely be in default under the mortgage terms, which typically preclude anyone removing or conveying any collateral or obligations pursuant to a mortgage, i.e., the remaining spouse couldn't sell portions of the property (collateral) or encumber it in any way.  Your wife would no longer have a legal interest in the property and couldn't use it as collateral, to Medicaid or any other entity.

5.   Transfer of your wife's interest could provide the mortgagee with grounds to "accelerate" the mortgage, also known as "calling the mortgage", which means that it could demand the remaining balance be paid in full by a date it would establish.  

You'd have to check the terms of the mortgage, but acceleration means the entire balance on the loan is no longer allowed to be paid in monthly payments;  it would be due as soon as the mortgage company complies with providing the necessary acceleration notices.

I've worked on commercial mortgages that were accelerated; I don't recall specifically what the terms were, but the mortgagors were given perhaps 1 - 2 months to comply; then the mortgage took action against the mortgagors.   Foreclosure followed.

Unless  you can pay off the mortgage, this could force you into bankruptcy.

No. 5 is perhaps the most dangerous possibility that could occur.

Bad ideas, all around.  Don't even consider them.

If you are at the point in time where your wife is needing placement into a facility and y’all are looking at Medicaid to underwrite the costs of her care, and r thinking of removing assets from her ownership, it is too too late.

That ship has sailed. ⛵️ 🌅 There is a 5 yr lookback.

I’m going to guess that you have been her caregiver now for her for quite a while and you are overwhelmed and that the level of care she needs is really more than you can do. It’s beyond a stressful situation. And your probably getting all sorts of conflicting advice & horror stories as to what Medicaid and Medicare will do or won’t do.

LTC Medicaid program pays for the room&board of a resident in a NH & has state specific “at need” requirements but under an overall federal guidelines. So exactly how things will run for an application in your state will be different than in mine.

If this was a DPOA doing it for their widowed parent, that type of LTC Medicaid application I think you can DIY if you have a solid POA, been a signatory on their bank accounts and have been actively involved in their life so you know if they have life insurance or the house is paid off and where paperwork is. Individual LTC application is pretty straightforward: show “at need” medically for skilled nursing care and have their income under the state max (tends to be $2200), have nonexempt assets under 2k & exempt assets (like their homestead, car) under the states max value. And be able to provide up to 5 years of financials to show that it makes sense for them now to be impoverished. A Dpoa can do it, might be a butt rash but do-able.

BUT for married couples it is way way WAY more complicated. Personally it is not ever a DIY its CELA level of attorney work. You are yourself not going into the NH, only your bride is. You would become a “community spouse” / CS for how Medicaid looks at your joint assets. Medicaid considers everything owned by the two of you whether as a couple or separately as assets. BUT you are not required to yourself become impoverished for her to be eligible. Like your SS income should not factor into her income determination for her eligibility; most states have the CS asset max at 128K and you will need to segregate it in a new bank account from her $. If there are a lot of liquid assets beyond 128k, a good atty will have options (like a Medicaid compliant SPIA) as to how to deal with this that is within Medicaid regulations.

Please realize that IF it is the case that in order to make your household expenses work, you need her mo income, then you as a CS can file for some of her income to be “waived” (shifted) from her having to use it as a copay to the NH and instead waived $ over to you. It’s called CSRA or MMNA, it’s basically a resource allowance & a good atty will know how to max it. Y’all still have a mortgage, right? That’s probably a good bit of $ every month, so you need to get her $ to make ends meet.

There was someone on this site whose mom was the CS & dad in a NH. Mom had extraordinary high RX & utility costs; her resource allowance shifted all but $45 of Dads monthly social security income over to her. His NH copay was $45.00. The playbook for NH / CS needs an savvy atty; not a DIY imo.

Also most couples have each their as their life insurance beneficiary or have a “pour over” will done for each other. All this has to change before Medicaid gets applied for. Why?….well if you get hit by a bus…. that life insurance policy w/ your wife as beneficiary will increase her assets and she will become ineligible for Medicaid and your gone, so who? would be there to deal with this for her… Yeah, married NH / CS is way way WAAAy more complicated, imo you need to speak with an atty before doing anything.

I’m going to do another post on my thoughts on mortgage situation.

It is likely way too late for that. Medicaid has a right to attempt to recover taxpayer money upon the death of your elder who is receiving care through taxes on medicaid. The government frowns upon attempts by family to shelter these assets. If you need to check out all of your options you should see either a Trust and Estate attorney or an Elder Law attorney. This will settle it in your mind. Never take legal advice on a Forum. Use experts in your own area