my mom lives at home she's 90, now she need to lives with one of us, her deed has been under our names 4 7 yrs,what happens when we sell he home, and she lives with one of her children, what do we do with the money from the sale of the home. can she go to an assisted living. Her inocme is ss only, we help with the rest.
thank you.
1. The house is totally in your name(s) and not in her's correct? Then start to refer to it as your "property" and not mom's house. The proceeds from the sale should go into a bank account that is either in your name (NOT MOM'S) or you could go an open a new account in your SS# that is dedicated to the "property" and gets the proceeds from the sale. I'd go ahead and do that now so you just have to deposit the check into it when it sells. If there looks like there will be expenses related to the house before the sale - like repairs, or staging costs or lawn care, etc. - I'd go an put whatever you think all that would be ($2,000 - $5,000 as a loan from you against the future sale of the property) so that the account is all about that "property". This will also be good if you have tax consequences or family friction and every penny spent can be easily documented. This all is good as there is NO money co-mingled.
Lets say the house clears 200K. The account gets all 200K and whoever paid for any expenses is reimbursed from the account (so you get a check for the $ 2K loan for repairs, etc before the sale) . Now mom goes into AL at 4K a month. Most AL is private pay and you pay for her for 2 years from the "property" account. Then 2 years from now mom needs a higher level of care and needs to go into the NH, you can apply for Medicaid for her as she has no assets and her income is only her SS so she should qualify.
Depending on the $ the house sells for should kinda determine what or even if you invest it. If mom is in good health she could easily be in AL for 5 years. So 5 years of a $ 4K a mo AL is 48K a year = 240K for 5 years. Horrendously expensive but that is the system. If they live long enough they will run out of $ unless they are uber wealthy. What you don't want is to put the $ into an investment and have a penalty (and it will be a severe butt whacking one) for having to draw out or close out (horror of horrors) early. I'd be happy with just the pitiful interest from the bank till mom dies. Yep it's boring but it's there and easily available if needed.
One thing you can do is a "special needs trust" for mom so that god forbid something happens to you and you can't be there to take care and buy those things for her that Medicaid doesn't cover (and there's a lot in this category), so the trust is there to pay for those things and it is funded from the sale of the property.
The trust owner would NOT be your mom but could be a grandchild and you or your spouse manage the trust and upon mom's death reverts to the grandchild - who is the owner but a minor. Understand? A lot of folks do this and the left over $ reverts to the grandchildren's college fund. An estate attorney needs to do this so that there will be no Medicaid asset issues later on. There is whole formula on how much funding is needed that the attorney can use as a guideline to see if it is feasible to do. Good luck.