My brother and I are joint owners with my father on his two story building, combined residential and business. My father is currently in a nursing facility and will need some type of long term care the rest of his life. He is 89 years old. twently years ago, he put his building and all his bank accounts in joint ownership so that we would have access to his affairs. I also have POA over his medical and financial affairs. My father's reasons for making us joint owners was so that we would have easy access his savings & building when he dies and that it would not be used up for long term care and have nothing left to benefit his children and grandchildren. Is his estate, our parts of it, in fact, protected, by us being joint owners?
As for the real estate, different rules apply. Generally, your father's percent ownership will be an equal share of the value of the property, i.e., if he is one of three owners, he will be deemed to own one-third, etc.
In all states, the Medicaid applicant's ownership interest in his or her personal residence will be exempt for purposes of qualifying for Medicaid. But in most states the business interest will NOT be exempt; some states, however, will exempt income-producing property. So it starts to get complicated!
Hopefully he has a pension and SS and maybe long term care insurance or life insurance with cash value that can cover it all.
Really the state's have the ability to do a very good vetting on the Medicaid applicants assets & income. The info is there and just a few keystrokes away from their real property assets being known. Raymond's dad is likely right now under Medicare but those Medicare paid days are about to expire and they are going to face a total panic on how to pay for dad's care. They need good legal to work with them in figuring out the whole clusterF of dad's assets & income.
Based on what Raymond has written, there is no way - with his dad's owning a commercial property, still having a biz, getting rental income - that dad is going to be eligible for Medicaid. Dad is not impoverished & he has non-exempt assets. I wouldn't be surprised if when Raymond starts ferreting out stuff that they find a whole life insurance policy or other things that have a cash value; and they find that dad has not kept up with his debts too. Imho they need a good legal to get all this evaluated and cleaned up not so much to get things done for asset-avoidance but to figure out what needs to be done to sell the assets to pay for dad's care. At this point, asset planning for Medicaid ain't an option.
But I bet that Raymond & his brother just don't have the $ to private pay for dad from now till forever. It will take time to sell property, to do a P & L on the business and figure out what dad's real income actually is. I wouldn't be surprised (based on what I've seen with others who have strong personality dad's who are elderly) that actually dad's biz has been on fumes for quite a while and there really isn't $ but just convoluted debt. A hot mess. What the attorney may possibly do is form a trust for dad - so that all of dad's assets & income is owned by the trust and when things sell (like the sale of property or from cashing in an insurance policy) the $ goes into the trust. Now the beneficiary of the trust will be the State. Neither Raymond or his brother will get any of the assets in the trust ever, but now perhaps dad will qualify for Medicaid. It would sort of like what a Miller Trust does for those who have just too much income to get Medicaid but not enough to private pay for Medicaid. But Miller requires the income to be guaranteed qualified income & I bet Ray's dad doesn't have this. The rental from the insurance company isn't that (qualified income would be like SS or other fixed guaranteed retirement like a federal annuity). They will need legal to do whatever is needed is done correctly.
The problem is that they(dad & his kids) did estate planning based on 10 - 20 years ago. I bet when all this was done dad was in his 60's (and dad was a big healthy personality) and everybody just assumed that even if dad needed care that it would easily be affordable. But the reality is that if one lives long enough that you will eventually run out of $$ as the cost of LTC is just staggering. Only if you are generationally wealthy can you afford wonderful private pay care and people like that aren't on this site! (LOL)
There are some things you can do now like start looking for & getting all the financial documentation for dad on a personal level and then everything on the business for the past 6 years. I'd go 1 year more than the 5 year look back. You know timing is good (Febuary) as the attorney may want to have you all do a major tax filing on dad and his biz for 2013 taxes so that dad can show impoverishment and do major loss for 2013 P & L on the biz. No time to waste as IRS biz filing are due mid March, 2014.
Just out of curiosity, is the biz successful and making a profit or is it the more the type of biz where it was successful decades ago but dad kept on with it and its profitability declined as he aged….but dad was stubborn and wanted to keep things going type of situation?
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