My mother is on Medicaid and SSI (not using assisted living benefits). She is 1 of 3 listed on the deed of the house in which she lives. The other two on the deed are her two sons including me. She wants to sell the house to move closer to us; we live in the same state, Georgia. She does not want to cash out any money from the sell instead use it to purchase another. There is a balance on the loan. Additionally, she put our names on the deed at the onset which was long before collecting Medicare and SSI. Are there any hurdles of which to be aware? What process should she take to avoid losing Medicaid and SSI? Thank you in advance, Jonathan
Ok so mom’s low income Medicaid, if she went onto Medicaid before age 55 then Estate Recovery should not ever be a factor for her. (But keep in mind that if in the future she needs to transition to in a facility Medicaid in NH or AL, that estate recovery will be a factor as it’s a different Medicaid program). The 3 mo reinvestment rules that Gripp describes will be something to be mindful of.
What I’d suggest you try to do to minimize any fall out with Medicaid is plan the act of sale timing to be on the 2nd or 3rd of the month AND mom has a house, condo in mind to buy within days of the act of sale. So that all funds are moved through her bank account within the same month. Mom begins the month and ends the month within the same income / asset situation so it’s no affect for Medicaid. Mom’s “income” & “assets” has to reported to Medicaid and any changes to it reported as well. For the month of house sale it’s income received and then for month 2 on its an asset. If the 13k - even though it’s a small amoUnt - just sits there it’s going to likely be too much $$ for medicaids tight financial requirements. Has to be reinvested asap. Getting sale and buying new place within the same month = no issues for Medicaid.
I’d try to find a good realtor in your area that has an affiliation with Realtor in mom’s town, so the sale is within the same umbrella and they can schedule act of sale for each to work like dominos at the beginning of the month. Like if I had to do this I’d go with Coldwell Banker as they are all over my area.
Remember 3 checks at closing.
Also remember all closing costs should be shared equally. If you &/or another brother want to give mom $ to buy her new house, or paying for movers, or deposit needed for utilities..... plan on these to be a gift to her. Not a loan as in theory loans could be looked by Medicaid as an asset. Write “gift” on the check.
Good luck on this & may your mom be moved in time for Mother’s Day.
1. Medicaid simply taking the money probably isn't a concern for you. There's limited cases when they can do that, and it's dictated by federal law: https://www.ssa.gov/OP_Home/ssact/title19/1917.htm
And even then, most of what they can do is impose liens, suspend benefits or request months overpaid to be repaid. not flat take things. Understand that they don't want people homeless or desolate, and (unless you do something fraudulent) will avoid actions that may create such a situation.
Estate recovery is probably the only concern you have. But that doesn't apply until she passes away, and is limited to specific qualifying costs.
2. She can sell the house, so long as it's for fair market value. That wont disqualify her. She has a 3 month grace between selling her home and buying the next one, so long as all of the money goes towards the new house:
https://secure.ssa.gov/poms.nsf/lnx/0501130110
Note if she doesn't get a new home in that 3 months they'll make her pay back the benefits she received since she sold the home. ... Best to make sure she has everything lined up before any triggers here.
3. Asset protection isn't something to run from. Working within the law to maximize benefits and limit liability is entirely fair. If an elder law attorney gives you advice on protecting an asset you should take it.
However, if the lawyer says something like "I'd never advise you to do something potentially fraudulent, but..." then run.
I would say to talk to her case workers first. Tell them the plan, and see what they say. Know, however, that they aren't liable... If you get in trouble for following their advice it's still on you. So, at least running the plan past an attorney is still advisable.
Like she’s low income, or is on some type of Medicaid expansion or its tied into some stage of SSI/SSDI? I ask cause the type of Medicaid eligibility she has will determine what happens and also if MERP/asset recovery is a factor.
Lots of folks are on Medicaid & lots are “duals” (over 65 both on Medicare AND Medicaid). Medicaid is a huge program from covering women who are pregnant, kids/CHIP, low income handicapped, to elderly living in a NH. Their commonality is they are low income/asset enough to qualify for Medicaid financially and are at need medically for the program their applying to.
To me the issue will be that by selling her 1/3 of the house, the $ she gets will be income for the month of the sale and then an asset afterwards. So it will be a factor for her continued Medicaid eligibility financially.
How much do you think her final 1/3 after mortgage paid off, closing cost paid, etc. will be mom’s 1/3? To me this is the key to what mom’s options are.... if all in she’s ending up with 12k that’s quite a different math problem than she ends up with 120k. So what is her 1/3 likely to be after mortgage, etc paid out???
As an aside, be insistent to the Realtors that at the act of sale that the proceeds from the sale to you 3 as sellers MUST be done as 3 separate checks written to each of you individually. This way it reinforces that it is/was 1/3 ownership. Otherwise it’s gonna look like all mom’s $ and be a stack of paperwork to sort out in the future. No 3 checks = no signing at sale. Be a real pit bullie about this.
For Medicaid MERP (Estate Recovery) to get involved would be for those over 55 who are having Medicaid pay for a long term care program, & LTC program can be in an facility like a AL or NH or a very structured long term community based program done in their home; & how it’s done depends on IF your state laws allow for a lien to be filed at the courthouse and placed on the property (not all do) or if instead it’s debt/lien on the owner &/or a claim on their estate. Whatever the case, Medicaid is unsecured debt unlike a traditional mortgage, HELOC or Reverse mortgage which are secured debt.
And if the one you go to talks about "hiding assets", run, don't walk to someone else.
Medicaid has a five year look back period. Did you live with her and take care of her before she went to the nursing home paid by
Medicaid? There are different rules in each state but it you had to move in with her to keep her out of the nursing home for 2 yrs there maybe a different rule about the equity. An Elder Attorney will know all the answers. Speak with them before you take any action. Some things you can’t undo!!! Good Luck!