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You need an estate planning/elder attorney to explain the laws in your particular state.
Rules can be complicated and Medicaid has become very strict in the look-back period of 5 years before benefits are paid.
Keep in mind that the days of appearing at the door of a skilled nursing facility and expecting a Medicaid bed to be available are dwindling. Depending on where you live, many facilities will only accept patients who can self-pay for 2-3 years before Medicaid kicks in, which is a very big chunk of money.
Take a look at the Caregiving section to check out the trials and tribulations that people have dealt with concerning Medicaid benefits before you get locked into any real estate decisions.
Are you saying that your mother wants you to have her assets and for the government to pay for her nursing home care?
When people speak of preserving assets for the next generation that is typically in reference to taxation strategies. The last thing a wealthy person would ever plan to be would be a paid by Medicaid resident in a nursing home.
The goal is Medicaid planning, at least in my mother's case. By selling her apartment to move closer to us, she will have cash reserves for the first time (in her life, really). The apartment was left to her by her mother, and she's lived in it for 30+ years.
She keeps saying she wants us to have the $, but she, despite my urging, has done no planning to make sure that happens. She thinks a will is enough, however she is beginning to need more help and needs to be close to us within the next 2-3 years, I wager. We could not afford to buy in her area. We'll be an hour away.
I wondered if by buying a life estate in our property, it would protect at least some of her assets from Medicaid, should she need long-term care.
Does that help?
most likely, her assets would have to move out of arms' reach out of her name. that is risky for her. definitely see a lawyer.
How is it defrauding Medicaid? People use life estates for exactly this purpose- to transfer the home asset to their children upon death, thereby protecting the asset. I'm just asking if the same thing can be done if she buys one of the apartments in our multi-family home?
IANAL, but that's not how a life estate works. A life estate would be your mother selling/transferring her house to you, retaining a life estate to use the property until she dies. If she owns the property, she owns the property, there's no life estate - the plan you describe is just a way of avoiding probate for the property, and it doesn't really protect the asset. You could possibly rent the apartment to her for a market rate, and use that to transfer money from her to you, but as others have said, consult an attorney.
In a philosophical mode, and not criticizing the OP for exploring options, if you have assets to cover late life care, you should use them before you take government money. Working up a scheme to give your assets to other people, then sponging off of the rest of us is evil. You are not entitled to take from the whole, just so your non-spousal heirs get a pile of money.
OP, I understand what you are trying to do. You do need a lawyer, estate planning/elder law is best. What you want to do is for your mother to buy the apartment - not sure how that would work if it isn't a condo (that's one of the reasons you need a lawyer); then to "gift" you the property (that can take years to accomplish) while retaining a life-estate in said property/apt. so that she is technically giving you the cash from the proceeds of her former property/apt.
She can also pay you for services rendered to her. When you take her shopping, prepare meals, clean her living space/apt. Those are services that she could be paying someone else to do, so it is not unreasonable for you to be paid. Again, this needs to be worked out with a lawyer in order for this to be considered valid expenditures.
And, as WRM20 said above, you can simply have her pay rent. Consult an attorney again, because you don't want the rental fees to be questioned.
Oh, did I mention what most others already have? See an attorney.
Are you saying that your mother wants you to have her assets and for the government to pay for her nursing home care?
When people speak of preserving assets for the next generation that is typically in reference to taxation strategies. The last thing a wealthy person would ever plan to be would be a paid by Medicaid resident in a nursing home.
"The last thing a wealthy person would ever plan to be would be a paid by Medicaid resident in a nursing home." I agree. After being a caregiver for many years to my disabled husband, I was forced to place him in a nursing home paid for by Medicaid when I developed Stage IV uterine/ovarian/colon cancer and was unable to care for him myself (as we did not have enough money saved for his nursing home costs as he had been disabled for many years, and at the end I had to quit my job to be his full time caregiver for several years).
Under the care of others (in Medicaid nursing homes) he needed to be hospitalized numerous times due to feeding and medication errors (during one period three times in three weeks) . He ended up dying, directly connected to multiple nursing home errors (yes, actual death)at age 65 (after only seven months being cared for by others). If I had known then, what I know now, I would have rather died myself from the cancer, and let my husband go into a nursing home paid by my life insurance policy rather than let him go into a nursing home under Medicaid.
That is how strongly, I feel about Medicaid nursing homes. I would rather have died, then allow my husband to suffer as much as he had to suffer under their sub-standard care. OP, do you really want that for your mother, just to save money for you and your siblings? Really?
Last edited by germaine2626; 07-14-2018 at 03:24 PM..
Although parents usually elect to keep a life estate in the home they already own and deed the remainder to their children, it is also possible to purchase a life estate from their children.
You most definitely need to consult with a Certified Elder Law Attorney ASAP.
Life estates can get a little complicated if the person needs to go in a nursing home and doesnt live in the house anymore even though they are legally entitled to it. In some cases, you can rent the house, but the rent proceeds need to go to medicare/Medicaid. And home equity, remortgaging or selling isnt possible. Remember they could be in a nursing home for 30 years.
I would rather have died, then allow my husband to suffer as much as he had to suffer under their sub-standard care. OP, do you really want that for your mother, just to save money for you and your siblings? Really?
The nursing home didn't make those mistakes or decisions, individual people did. And they dont work at other nursing homes.
Some places have very good staff and some do not.
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