CarrieLockhart Asked October 2019
Can my mom sell her house right now, knowing my Dad will eventually go into a nursing home?
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They are both 75, and my dad has already lost one leg (below the knee) due to diabetes. He will most likely lose the other leg soon. She wants to keep him at home as long as possible because she can't fathom losing everything they have worked and saved so hard for. My mom has had to take care of the house (inside and out) for a couple years now, and it's difficult. They need to sell and get into something smaller (like a patio home) with no steps. Currently they have 5-12 steps, depending on which way you enter the house. I know the community spouse gets to keep the home, so can she sell it now and put the money right back into another one, without penalty in near future? I hope I'm making sense.
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Selling the present homestead residence and purchasing another should not be an issue with respect to future Medicaid eligibility.
When budgeting keep in mind that even if your father were to enter a nursing home, a portion of his income may be "diverted" to your mother to help support her housing needs. The amount she may keep of their combined gross income will be between $2,057.50 and $3,160.50 (the Minimum Monthly Maintenance Needs Allowance or MMMNA).
To amplify on and correct some of the answers posted...
With respect to assets and Medicaid eligibility, at the time of eligibility determination Tennessee will allow the Medicaid applicant spouse (aka Community Spouse) to retain all combined "countable" assets up to $25,284 (amounts are adjusted annually).
Above this asset level the state will require that countable assets be split 50/50 between the couple. The Medicaid applicant spouse may retain only $2,000. The Community Spouse may retain up to $126,420 of the 50%. This compels the Medicaid applicant spouse to "spend down" their 50% to meet the asset eligibility requirement of $2,000 or pursue some other legal way to devise (transfer) the assets without incurring an eligibility penalty. Sometimes as was suggested, a Medicaid Qualified Annuity will be helpful in this process (converting an asset to income) however the higher income generated by the annuity may affect the MMMNA as described above.
This planning can become quite complex and Tennessee requires that an licensed attorney provide advice regarding the transfer or assets of income to obtain Medicaid eligibility.
On other issues...
Tennessee does have a Medicaid Home and Community Based long-term care Waiver program that provides benefits for home care and assisted living. https://www.tn.gov/tenncare/long-term-services-supports/choices/what-home-care-services-are-covered-in-choices.html
Medicaid home based benefits typically require no co-pay and the couple will be able to keep all income for housing and medical needs.
Also mentioned was the potential for VA benefits. Service connected benefits known as Compensation or "Disability" may be an option if your father was a veteran who has injuries or disabilities resulting from active duty service. If circumstances are such, it may be possible for an award to be granted but it may literally take years.
If, however, your father is a war-time veteran (he did not have to have served in combat) he may be eligible for and may qualify for a NON-Service Connected benefit called Improved Pension. This award may provide a monthly benefit to the couple of up to $2,230 per month to assist with home care or provide some assistance with assisted living expenses.
Medicaid home care services and, if applicable, the VA benefit mentioned above may permit your parent's to age in place for quite some time.
I wish you and your family well...
I’m guessing your to be the POA? If you have siblings and they for sure won’t be all huffy & challenging to your decision making as dpoa in the future, have a sibling go to be the note taker. If siblings likely to be difficult, I’d suggest a friend takes notes.
if atty sends a questionnaire, fill it out in detail in advance
if they have any old legal done - like a will or existing DPOA- take copies of those.
Find the paperwork on the house - like Warranty Deed, Release of Deed of Trust -& take those as well as the last Tax collector bill (this one should be going out right abt now for January, 2020 due).
if you don’t have a pretty solid idea of what their monthly income / to expenses are, now is the time to spend couple of weekends pulling all that together for them. Like this years bank statements, ‘18 & ‘ 17 taxes if they still file, anything that pays them $.
also find their “awards letters”. These are a trifold mailing that SSA & federal type of retirements send out usually in Nov. Other retirements also send these out but can do them close to EOY 2019. “awards letters” state to the penny what monthly income will be for 2020.
If the plan needs to be that dad flat requires a higher level of care & needs a NH, clearly ask just how state of TN Medicaid evaluates “at need” eligibility for skilled nursing care. Often families get all in the weeds on the financial aspect of LTC Medicaid BUT he also must show to be “at need” medically for skilled nursing care (aka care in a NH). A lot of states really have narrowed medical eligibility and now require an assessment w/fat health chart that clearly shows he needs skilled nursing care. Not just AL or MC but skilled nursing care in a NH as most states LTC Medicaid do not pay for AL or MC. I was able to have my mom go from IL to NH and bypassing the AL phase entirely a few years back, & she went into the NH as “Medicaid Pending”, but if the situation was now in 2019 she likely imo wouldn’t have met the current much tighter standards for “at need” medically for NH.
Also if you don’t get a good vibe with the atty, there will be another one to see...... most do first maybe 20-30 min visit for free or a a nominal low initial consultation fee. Getting info together in advance really helps use that first visit optimally. Good luck & try not to let yourself get overwhelmed too much!
BUT whether it’s going to be best to buy it outright so no mortgage or have a mortgage and use some of the House sale $ in other ways, that to me are the bigger issues to think about. At 75, if mom is pretty healthy & likely to be even healthier once dad has moved into a facility, she could have another decade or two ahead of her. And she’s going to need all the $ she can possibly keep so she can maintain her living standard till years & years from now.
Your mom as a community spouse is NOT required to impoverish herself for dad to be eligible for LTC NH Medicaid. Only dad has to be impoverished. Her income does not count & her income does not have to be paid to the NH. However dads income does. The “income” can be sticky to deal with for couples.....
AND for LTC Medicaid all their assets are counted but mom as a CS is allowed to keep a certain amount of $ as her own assets. For most states this is $126k. You need to find out exactly what the CS asset max is for your state. And then what they have in non-exempt assets & without counting whatever the house might sell for.
are they over 126k in assets right now?
what might house sell for? & likely cost to buy a new house?
what’s her SS or other monthly income?
And does she right now need dads income in order for thier current household (including her medical costs) to run?
depending on what the #$’s are, it might be better for mom to have a mortgage and instead use some of house sale $ to get for herself a SPIA (single premium immediate annuity, if your state allows for these) and the SPIA pays her the lowest amount allowed under actuarial tables as income each month. Then since she has a mortgage, atop her regular living costs, she files to get CSRA (Community spouse resource allowance). CSRA waives some of dads income from all basically going to the NH as his required by Medicaid copay and instead some of it goes to mom as she needs more income as she has that pesky mortgage. Financial planning when there’s a healthy youngish CS and a NH spouse is imho flat not simple. Personally to me for these situations your folks are best off meeting with a CELA level of elder law attorney.
as they can give you all options as to what works best for how Medicaid runs for your state and deal with the speciality underwriting needed for doing a SPIA.
btw I hate annuities in general& think they just don’t work well for most, but a SPIA is a very unique very restrictive type of annuity that can work for healthy younger CS.
about “keeping” the house.... Medicaid requires all states to do an attempt at recovery (MERP) of all costs paid. But there are exemptions and exclusions to MERP. & just what these are dependent on your states administration of Medicaid and laws for probate & property rights. A lot of states place a unsecured lien onto the property that exists until property is sold or it’s a claim against the estate if she dies. If there’s still a mortgage, the mortgage Co is a secured creditor, so they get paid first & foremost. If there’s no $ after mortgage paid off, then there’s no recovery as no $. Sometimes having a mortgage in your 70’s or 80’s can be a good thing......
She has already told us kids that she cannot even afford to stay in the house without my dad's SS check, so......... her income is well below the state's minimum monthly maintenance income level.
I do not know what their assets are, but there is no way her half would be over the allowed $126K. I just hate that they have to split the amount of money they have, only to have to spend his side all the way down to $2,000. It makes no sense when the CS needs that money to survive. That's why she said she'd like to try keeping him at home, because what if she "spends down" all that money, and he dies 3 months later in the nursing home? She is out all that money. This process is very frustrating.
I will let her know what you said about paying off a new house vs. having a mortgage. It sure makes sense. She could possibly live another 10-15 years if she makes it through this stress.
Don't let mom become overwhelmed by caring for dad and for the house! This is a change that needs to be made soon
I am no expert but I would think if the house that is purchased is of the same value then there is no problem. The problem might be if the house they sell is worth $900,000 and the one they buy is $200,000.
This might be the time to sit with an Elder Care Attorney and ask these questions.
Also..if your dad is a Veteran it is possible that you (your mom) can get help through the VA. And it may be a lot of help depending on where and when he served. They have changed a lot of the criteria for what they determine to be "service connected disability"
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