Do we need an attorney to keep my MIL's house that we live in?
Hello from Texas,
I'm hoping you all can help me sort through some things so that we can be better informed to seek an atty or not.
About 2 years ago myself, husband and 2 kids moved in with my MIL. She's 83. It was a mutual decision to help us reduce our living expenses after a job loss but also to help her around the house and help with her expenses. Since that time we have split the mortgage and utilities 50/50, but we pay for all food. She buys her own specialty items like certain toiletries etc. We also split all home maintenance expenses. We do not have any kind of written agreement to this effect. My husband is her only child, so there are no other siblings to contend with. My DH has a POA for her, and she put him on her bank account in case of emergency we could access funds. We are her sole beneficiaries for her small savings, small life insurance, and her house. The strange thing is that she is a retired school teacher from Louisiana and never paid in to nor receives SSI. She says she "opted out" way back when, so she receives her retirement income and has medical insurance from her retirement, but no Medicare.
We are most concerned with protecting the house in case she should need more care than we can provide. I would like to protect some of the cash too, because it's her desire to pay for her own funeral expenses and she has some of it pre-paid but there will need to be cash on hand too. Her wish is to live as she does now, and die peacefully in her own bed someday. While I hope for that for her too, it's not a likely scenario. It's very difficult for us to even discuss nursing home care because she adamantly refuses it. I don't WANT to put her there, but I am afraid someday this might be a reality. For now she is pretty healthy, mind pretty clear, but she does have debilitating arthritis and can not hardly go anywhere except doctor appointments and the occasional restaurant. She does not drive, I do all errands and driving for her. She uses a walker full time and I do all the cooking and cleaning for all of us.
I don't even know if someday she would qualify for Medicaid, but I am assuming if the day came and we needed to put her somewhere, we would apply. If approved they take all her income, her liquid cash assets, and then put a lien on the house? Even if we live here and it's our home? Our name is not on the deed. Should we attempt seek an attorney to work on getting out names on the deed? Is there any way for her to set aside like $5k for burial expenses in my DH's name so that it wouldn't be taken? Aside from that I do understand them taking her assets, but the reality is that this is our home. We are hoping to stay here long term, finish raising the kids here and retire here.
We need to have a "family meeting" to discuss all this. Can you advise if there are any other questions I should be thinking about? Things to discuss with an atty? Things to bring up with MIL now, while there is no crisis, so that we are all prepared?
I'm a little overwhelmed with all of this. We really don't have money for an atty but will seek one if our case warrants it.
Thanks for any help and wisdom you can share!
~Amy
10 Answers
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For Medicaid, you have to have an actual policy done & paid for. They aren't going to go with, it's $ set aside for later for funeral story.
My bad, "Paul" is Paul Premack. NAELA in TX.
I'd look into having an enhanced benefit trust done aka a lady bird deed on the home. The mortgage would still need to be paid off to have the LBD happen but would solve Medicaid claim issue. There are only 5 or 6 states that allow LBD. LBDs bypass probate and as such cannot have a MERP class 7 claim placed as MERP is ultimately a probate action. In theory no probate = no MERP. LBD are not a DIY project, you need an experience elder law guy to structure this. Google NAELA Texas for the list. Drewitt in Beaumont & Premack in SA are good, seriously good. Paul does an online elder law for the most basic items for how TX laws work & seems very affordable for the level of his expertise IMHO.
Your other option, is to have mom transfer the house to you after she pays off the mortgage. she gifts it with no $ paid. Now that means NO Medicaid till 2020 otherwise a transfer penalty. Transfer penalty is base on the states reinbusrement rate for NH room& board paid by the Medicaid program. TX pays $145 a day ( and is 49 lowest in reinbusrement!) so a house with tax assessor value (look at tax bill, it went out in October and due by Jan 31) of 85K is 586 days of ineligibility. There is a specific equation on this on the TXDADs website and it is loco to figure out..... 5 years is a long time,a lot can happen before 2020.
LBD's allow the house to stay in her name with whatever lower taxes, exemptions etc due to her age.
Mil can get Medicare but it will cost. She will have self pay for part A ( this is the part that FICA takes out for, so almost everybody ....but your mil...gets part A from working in US and paying FICA) it runs about $410 a month plus the payment for part B, which is about $100 a mo. Then whatever paying part c & d that fits best. It will be loco to figure out too, I'd keep the blues as long as possible. But just remember that Medicare can be done and she may want to if she can afford and there get to be issues with BCBS. BTW if she gets on NH Medicaid (Medicaid not Medicare), the blues will likely send a letter of inquiry to cancel or suspend her policy as Medicaid can now be her primary. My mom had federal high option blues since forever and once she got onto Medicaid (she was on Medicare as well) for NH, her blues got suspended.
And about the names on the deed. As mom does not own the house, she can't just add your name. Mortgage holder has to allow to be this to be done & I'd bet they would want a new mortgage done. Cancel & release the old one, & do a new deed of trust. If you have credit issues, they are not likely to do it.
Out of curiosity, are there a lot of other debts for mom? Is the house feasible to afford and works for all 5 of you? Would it work to sell the house, pay off the mortgage and then moms loans or gifts you the rest of the $ to buy a newer less needy house that is more affordable for all? Mil could pay you rent as she gets retirement/SS - rent needs contract & whatever else to be legit (what I don't know). Then you have rent $ towards your mortgage & hope that she lives a long life!
Geez a mortgage at 83.
We all hope to die peacefully, in our own bed. That doesn't happen very often.
My mother put me on the house title, many years ago. But, I don't live there. I hope all of this works out for you.
$2500 is A LOT of money to us. I know it seems like small bananas in the grand scheme, but it's a lot. Good to have a rough idea of cost though.
The tenant thing is something I have not thought of. She wouldn't like that, and certainly neither do we. I guess an atty is the only way to fix it. I assume we will not need care before 5 years, but you just never know what will happen.
honestly, a good attorney can fix those assets for you for a fraction of what it would cost you later . chances are you already own the home for services rendered .
You would also need to check with Mom's mortgage company to see if the mortgage can continue as is with you paying, or would you need to get a new mortgage with your name as the Mortgagee.
I am curious why your Mom doesn't have Medicare? Does her retirement insurance cover all hospitalization? You might want to check to see exactly what is covered. Of course, it would be expensive for your Mom to sign up for Medicare now, 18 years after the fact. My Mom signed up 4 years after the fact because she was under my Dad's health insurance with his employer and Dad was 4 years younger than Mom... oops, when Mom needed to sign up with Medicare at 69 year old, she has been paying higher Medicare premiums for the past 28 years.