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Has anyone had the experience of setting up a life estate in your own home in the name of your parents? I see a lot of information on setting one up for your parents home, but not the child's home.
My husband and I are buying a multi-family property, with the goal of moving both of our mothers in as our tenants. The property will be owned by the two of us only (well, and the bank!). We are wondering if it's possible to set up life estates for one or both of them in this property to protect their assets.
I think you need to ask an attorney. Laws may vary by state.
Yes, the only appropriate answer. I could easily see a situation like this wreaking havoc in anyone of you (either mother, or you or your spouse) needed to go on Medicaid. It could be problems, in the five year Medicaid lookback, if they are paying lower monthly rent payments than are standard in your area and/or also (may or may not) cause problems if they have their names on a title of an expensive house and need Medicaid.
BTW, I don't understand how you and your husband buying a house with your money is going to protect your parents assets? (unless you just mean that their rent payments will be going to you/the mortgage instead of a rental company? or do you mean that they will always have a place to live in until they die?)
Thank you for being pro-active about caring for your parents. Now, make an appointment with a top ranked elder care attorney for legal guidance.
Last edited by germaine2626; 07-14-2018 at 07:48 AM..
In another thread started by the OP it sounded like they wanted the parents' house protected (for them to inherit) while their parents went on Medicaid.
In another thread started by the OP it sounded like they wanted the parents' house protected (for them to inherit) while their parents went on Medicaid.
Hmmm. In this thread, it sounded like they were going to buy a "multi-family property" in their own names and have the parents rent from them. Anyway, it is always best to consult a good attorney.
Hmmm. In this thread, it sounded like they were going to buy a "multi-family property" in their own names and have the parents rent from them. Anyway, it is always best to consult a good attorney.
Right. But the "whole story" as described in other threads is that they wanted to "preserve" the parents' house so it would stay in the family (i.e. be inherited by them) ... while the parents went on Medicaid. Hence the .
Maybe they are talking about the parents gifting them the house, putting it in their name. Medicaid has a five year look back. Also, any gift over a pretty small amount has to be reported to the IRS. And changing a title over will definitely trigger a 1099 or some sort of reporting to the IRS.
Maybe they are talking about the parents gifting them the house, putting it in their name. Medicaid has a five year look back. Also, any gift over a pretty small amount has to be reported to the IRS. And changing a title over will definitely trigger a 1099 or some sort of reporting to the IRS.
Good points.
And, the Medicaid look-back is very detailed. When I was filing out the paperwork for my late husband, I had paid money towards a bill on a joint credit card with our daughter a year earlier. Even though, it was a joint credit card ALL of the money paid towards the bill was considered an "illegal disbursement" of money (ie. trying to hide money from Medicaid) even though I had made some of the purchases on the account for things for me/my husband.
Sometimes, Medicaid will ask for five years of bank statements and you will have to explain each and every check over a certain amount (like $500). I did not have to do that, but I did have to sign a legal document that I/we did not give away any money to anyone including my/our children.
And, the Medicaid look-back is very detailed. When I was filing out the paperwork for my late husband, I had paid money towards a bill on a joint credit card with our daughter a year earlier. Even though, it was a joint credit card ALL of the money paid towards the bill was considered an "illegal disbursement" of money (ie. trying to hide money from Medicaid) even though I had made some of the purchases on the account for things for me/my husband.
Sometimes, Medicaid will ask for five years of bank statements and you will have to explain each and every check over a certain amount (like $500). I did not have to do that, but I did have to sign a legal document that I/we did not give away any money to anyone including my/our children.
I had to explain and have a copy of every check over $500. It was a PITA because I had been paying her bills with e-checks through the bank account, and apparently there is no way to get copies of e-checks.
Once when I was printing out and sending the bank statements, I thought I'd save ink and paper by printing pages 1-3 and leaving off page 4, which was only a blank page with lines to balance your account if you chose, and that caused a hold up until I printed them out and sent them later because the top of the pages said "page 1 of 4" and I only sent 3.
In looking up Life Estates, it seems it does not allow you to avoid the 5 year look back:
"Also, the transfer of the life estate deed triggers the waiting period for Medicaid eligibility. This transfer will start the five year transfer period, after which the property should be protected and Medicaid benefits obtained. If you need nursing home care within five years of signing the life estate deed, you would have to pay privately for your care until the remaining penalty period ended."
It didn't say much about making the kid's home the life estate, as OP is asking about. Only this:
"Another Medicaid planning strategy involves a parent purchasing a life estate in the home of a child. Medicaid allows this technique so long as the parent actually resides in the home for at least a year after the purchase."
"Another Medicaid planning strategy involves a parent purchasing a life estate in the home of a child. Medicaid allows this technique so long as the parent actually resides in the home for at least a year after the purchase."
This seems to be what OP is after.
OP, there is no way for both mothers to do this, and having a mortgage it's going to be tricky to do it even for one. From your other thread I gather you are worried about your mother holding onto the proceeds of the sale of her apartment, and them getting eaten by Medicaid eventually, is that correct?
What is the situation with your MIL?
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