Follow
Share

Buying a house with her was supposed to be our "IRA"…not really but we gave her money instead of contributing to our IRAs, thinking we could sell it for a profit and that she would give us the equity. She got too sick to stay alone, so had to move her in, and she only gives us a little grocery money. My lawyer said we could withdraw "back rent" without messing her up for the look-back, but can we take withdrawals (to pay us back) for the money we put in her account so she could keep getting enough interest to pay her share of the mortgage without messing up her Medicaid eligibility? They said if she gifted any money, it would delay her eligibility by the number of months of NH care the amount would have paid for.

This question has been closed for answers. Ask a New Question.
Amicable - is your attorney an elder law speciality attorney…like NAELA? If not, I would go to see one who does elder law as their speciality & is on a NAELA list. My experience is that the forms and agreements really need to be done to pass muster for how Medicaid is reviewed in your state and that most attorneys just don't understand the complexity of Medicaid and MERP (Medicaid estate recovery). They can likely do an caregiver agreement - like what our beloved Cap' had done - but it needs to be structured just right legally. Good luck.
Helpful Answer (2)
Report

amicable - then you should be OK although it may seem convoluted at times! It sounds like he is doing a "bridge loan" documentation to get around any Medicaid transfer penalty issues.

Transfer penalty issues are a beast to deal with and whatever you can do to avoid it now is well worth it imho. Remember Medicaid can ask for up to 5 years of all financials from mom - that could mean 5 years of each banking account statements as well as all her insurance policies and anything else of value (insurance, property ownership). For my mom the initial review was 3 years & 6 months and over 100 pages of documents (which the NH reviewed and in turn submitted to the state along with their Medicaid bill). One thing I had to do was provide for details on every account, CD, Tbill, etc closed out and where the proceeds went. For us, we were lucky because once they expired they were not renewed but deposited into her main drawing account. I had to sit with a bank officer almost a full morning to get this done and on bank stationary and notarized. I am sure that if a 5K CD was not deposited, my mom would have had a 5K transfer penalty inquiry done.

The transfer penalty is based on your state's room & board daily reinbursement rate for NH Medicaid. For TX it is about $ 145,00 a day (pitiful low too). So say the amount is 25K, then for 172 days they are ineligible for Medicaid to pay for their NH stay although they are on Medicaid in TX. I'm generalizing as there is a whole formula which I cannot ever figure out & I'm pretty fricking OCD on this. Transfer penalties are a nightmare because they surface after mom has moved to the NH and then you get the transfer penalty inquiry and the NH gets the letter too. So the NH will expect someone to private $$$ pay for mom's stay asap till this is all worked out……this is why it is fabulous you are working with the attorney now.

Now the $ 300 hr is pretty standard rate. We used an estate attorney and he charged based on documents and a % of the estates value (similar to what an attorney would charge for doing probate); this was done ages ago & before elder law was a speciality that it is now.

It would be good for you to google your states Medicaid site to read and also your state's MERP site & also see if there is an elder law attorney in your state who does a blog and read their posts to familarize yourself with Medicaid for your state. Keep in mind that Medicaid is a joint federal & state program which is administered by each state independently. So what flies in TX may not be kosher for Vermont. How your state runs it's programs will be entwined in how your state views in law property rights, etc. Do a list of specific ? to ask the attorney so you get the best use of your $ 300.00 hr.

This is especially mucho importante if you have to deal with MERP - Medicaid Estate Recovery Program. If mom keeps her home and goes into a NH and continues to own the home, you will have to deal with MERP after she dies. Most families end up selling mom's home and using the proceeds from the sale to do a spend-down before applying for Medicaid. But mom can keep the house, but the big i$$ue then will be just who in the family will pay for everything for the house for the rest of mom's lifetime. This tends to be the deal breaker on keeping the house, but if you can afford to pay for the "nut" on the house, you can do this (nut is taxes, insurance, utilities, yard, etc). What families often do not realize is that NH Medicaid requires a co-pay or the "SOC" (share of cost) of all their monthly income except for a small personal needs allowance ($ 30 - 90 a month again depends on state). So basically mom's SS and retirement goes to the NH, so there will be none of mom's income to pay for anything on the house till forever.

? for you?, so mom owns a home, right ??? but lives with you & your hubby in your own home?? Is this right? If so, you kinda need to think about just what is feasible in the long run for mom's house. This after the "bridge loan" gets worked out. If mom gets on Medicaid for NH, and owns a home or a share of the home then MERP will likely be something you have to deal with after she dies. While mom is alive her home is an exempt asset (by & large) for Medicaid but once she dies, then the exemption goes away and then the asset is subject to MERP's recovery.MERP has many of it's own exemptions which you have to file for too and within a pretty specific timeframe. Just how - again (sigh!)- depends on your state's laws. Like for TX, Medicaid is able to place a claim against the estate (a CLAIM and not a LIEN) who's only probatable asset will be the house. If you pay on things for mom's house & you have your own home, then all normal expenses paid to maintain the house are exclusions from MERP's recovery amount. But you will have to file for those exclusions and with documentation to MERP.

Now many states are outsourcing MERP, if your state is one of those, ask the attorney how this may have changed how to approach probate (and the transfer of the property ownership via probate). Also ask if he will do the probate filing or if he has a probate attorney he/she refers that too. Good luck and really none of this is simple or easy.
Helpful Answer (1)
Report

Well good news about the house. Personally I would take whatever the exact proceeds from the sale of the home ended up being and put this in a brand new bank account in your name but with your mom as a signature. The $ just stays there untouched till all is worked out and she is accepted on Medicaid.

About MERP, that isn't done till they die as it is a claim or a lien against the estate of the deceased. It is ultimately an action in probate court.
Helpful Answer (1)
Report

i think you should rely on your attorney on this one because he could not only give you the best advice but could guide you thru the process. he could do you up an almost instant caregiver agreement that would allow you begin recovering some of your money. i think our carer agreement allocated me about 1700 a month although in reality id have only taken the 400.00 a month i needed to cover my meager bills. mom didnt live long after the agreement was drafted so fortunately i dont have income tax ramifications to worry about. it would be a mess to be taxed on money you actually never took reciept of.
Helpful Answer (0)
Report

Igloo, Our atty is NAELA, and is wonderful, but I can only afford so many visits at $300/hr! I was just wondering if anyone was familiar with the process.
Helpful Answer (0)
Report

Thanks, Igloo…the house actually just sold. There was no gain on the sale and not much equity, so am I correct in assuming we won't have to worry about MERP?
Helpful Answer (0)
Report

The other thing is we can definitely document all our contributions to her account so that she could make the mortgage payments, so is it ok for us to take that money back?
Helpful Answer (0)
Report

This question has been closed for answers. Ask a New Question.
Ask a Question
Subscribe to
Our Newsletter