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The house is in her name. Me and my dad are continuing to live here. There is a mortgage on the property in her name. She was paying it but recently moved into a nursing home. Should we keep paying the mortgage?

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Have you seen an elder law attorney? You also need to talk with Medicaid. If you provided medically necessary care for a period of two years in some states Medicaid will allow you to remain in the home. The necessary care would need to be documented by her doctor. But, yes you will have to continue payments or the bank will foreclose.
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The federal government has an exemption for Medicaid recovery on a property if a family member has been a caregiver at least two years and that care allowed the parent to stay out of a nursing home. Like gladimhere said, you have to show documentation that your mother needed care during this time and that you were the full-time caregiver. States can differ in the way they handle this. You may be given the title to the house or you may get a life estate. Check to see how your state handles it. That will help you make a decision about what to do.
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Please have your dad keep records of any money paid for keeping, maintaining, and insuring the house. This money will be deducted from the lien amount if the state does do recovery on the house. I should ask you who was the primary caregiver for your grandmother and if they were there full time. If your father is the heir, but worked full time while other caregivers came in (or you did the care), I don't know how the state would handle it.
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King - keeping the elders home once they go into a NH and are on Medicaid can be done but it will mean family will have to assume all house costs from day 1 of NH till beyond death & probate / post death costs and runs a risk of not getting the home due to the required estate recovery - MERP - aspect of Medicaid. And it will get complicated.....As 1 who has done this and am amidst probate, I will say it is not for the faint of heart and you must have the $, time, patience and sense of humor to deal with a house that you do not have ownership on.

Gran has to pay the NH her monthly income to the NH under Medicaid rules. So if she keeps the home, all house costs - property tax, insurance, utlities, maintenance, etc - will need to be paid by family and paid until the house is sold or transferred to family (if you get through MERP). Your situation is that you all have a mortgage atop all this as well. It could be affordable or expensive. I'd suggest you ASAP do the math as to all house costs and see if it's affordable each month. If so, yeah, it's a lot like paying "rent"....if the mortgage, house costs etc are low, it could be less than rental in your area so a good thing even if later on - perhaps even years later - the property is sold to reinburse Medicaid.

Now I'd also suggest you look as to what exemptions & exclusions are available to heirs under MERP rules for ALabama. These should be on your states medicaid website. AL has outsourced MERP to HMS and HMS is very VERY very proactive in recovery & very detail oriented. For states that now are using outside contractors - like HMS & PCG - they get a % of recovery plus contract fees so are incentivized to get recovery done but have to do this within MERP rules. Now within MERP rules are all sorts of exemptions & exclusions & cost-benefit requirements, one is for caregivers so if you / dad have been providing care and did this full-time for probably at least 2years prior to Grans NH entry and can provide a letter documenting need from Grans MD or SW written by them on their letterhead with state registration & licensing info then you probably should qualify for caregiver exemption. But 1 sticky with this is when the caregiver exemption is done.....if it can't be done till after grannie dies well that could be years from now & getting the documentation could be difficult. I'd try to find out clearly & definetly from Medicaid as to how AL does the caregiver exemption and you /dad do whatever now to set it in place.

If you & dad each work full time, you can probably forget qualifing for caregiver exemption. If you or dad were in school or on disability, that too will probably disqualify you for caregiver exemption.

Another factor is who in grannies legal & valid will inherits the house. Each heir has to establish their own exemption or exclusion to MERP. So if dad is one of 3 heirs, but only dad has caregiver exemption, estate recovery - via a claim or lien - can be done on the other 2/3 of value of the home.

Also the value of grannies house will be very important as this is tied into what MERP expects recovery to pay out. If the tax assessor value of the home is whack, I'd suggest you get the house appraised to establish value asap. Often with elderly homeowners, since their taxes are fixed, they do not pay attention to increases in value over the years. If the area has lots of tear downs & new builds, the value could be way WAY way off if grannies is an old house with decades of delayed maintenance. It must be an valid appraisal done by a licensed appraiser with their seal on the document too. Realtor comps are nice but are not legal.

Also grannies homeowners insurance will not be valid anymore if it's viewed as she doesn't live there anymore so not homeowner occupied. Just what policy will be possible depends on insurance carriers in AL. If you or dad is the dpoa, then you have a required fiduciary duty as dpoa to safeguard the house. Also the mortgage agreement will require the property to be fully insured, so take care of insurance asap.

Keeping the house can be done but will require detailed documentation of all costs you must pay over however long grannie lives and then till probate is done & / or MERP releases it's claim or lien. As you live in the house, the empty property costs of maintenance exclusions to MERP - in some states - probably will not be allowed to offset the claim or lien. Also the mortgage holder doesn't care that you have been paying the mortgage, the credit history for prompt payment is only tied to grannie. If she should die before the mortgage is paid off, the whole balance will be due and mortgage payment still made during however long probate runs. Like I said...it gets complicated. Really before this goes on for week$$s, get new insurance estimates & look at ALL house costs & do the math on staying & paying or moving. Good luck dear!
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Oh, Alabama. I have read that Alabama delays recovery if there is an exemption, but keeps the lien on the house if there is a spouse, sibling, or caregiver that qualifies for exemption. The person is given a life estate that ends when they die or move. I have not verified that this is true. I know we can't believe everything we read on the internet, and some things can be hard to interpret correctly. I would check with someone who knows for sure. I suspect it is true, since Alabama is not a friendly state when it comes to Medicaid matters.
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Yes, you can continue to pay the mortgage even though the mortgage and deed is in your Grandmother's name.... but once the mortgage payments stop the the house will go into foreclosure and the bank will take back the property. I assume the mortgage payments also include the homeowner insurance premiums and the real estate property taxes.... if not, then you and/or your Dad would be responsible for those items.

Question, is your Grandmother self-pay at the nursing home, or is Medicaid helping with the payments? If Medicaid is paying, chances are Medicaid will place a lien on the house so that they can get paid later down the road. But if you and your Dad had been caring for his mother, thus keeping her out of a nursing home [depending on her condition] Medicaid might not do the lien.
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King - I was assuming the Grans mortgage is a traditional mortgage. If its not and it's a Reverse Mortgage....well forget what I wrote. RMs require them to live in and occupy the property. So grannie moving to a NH means she is no longer compliant for RM agreement so the RM is called in. If so, you & dad face stark & limited choices....either find a way to pay completely the RM within 6 mos if it's a federally backed RM or move out ASAP. Spending a penny by family on a RM property is IMHO a total waste unless you can fully pay off the RM ASAP & want to. Often for elderly who die with a RM house, family just walk on dealing with it or probate as all costs to deal with probate or with the house, they can never get reinbursed for as executor as there are no assets just secured debt held by the RM.
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igloo572, I was thinking the same thing, why does Grandma still has a mortgage [depending on her age]. Wonder if she had refinanced to get some equity out and used up that equity.
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This has nothing to do with the mortgage, but an important matter, nonetheless.

If your grandmother has homeowner's insurance on the house and is in the nursing home permanently, you can expect a letter from the insurance company as soon as they find out she's not living there. The homeowner is required to live in the insured dwelling in order to have coverage. If she is not living there and has moved into the nursing home permanently, they will most likely cancel her coverage.

The only solution offered by most insurance companies is a dwelling fire policy - or a "landlord" policy, where the homeowner is considered a landlord and the dwelling is considered a rental, so the relatives living there would be tenants and would have to obtain a renter's policy to protect their possessions that are in the house - because the dwelling fire policy will not cover it.

Just something else to be aware of. I'm dealing with this myself right now, and I know many people would be unaware that this would happen.
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Susan - yeah property insurance for a NH resident or their estate property is totally sticky. I mentioned this in my earlier post on this thread. What insurers can do is really dependent on your states insurance laws.

I have a Vacant Dwelling Policy on my moms house. VDP are not cheap and mine done by an independent agent. The state farms, usaa's won't underwrite them I found. I got maybe 5 estimates and they varied wildly in cost and period. Some underwriters seem to require a verifiable (tax assessor value) of 100k or more. For VDP coverage is just fire. No theft. 100k for about 2k for a year coverage for my situation. If there are workers doing repairs or house is listed & being shown then I would have to add on a liability rider for this. Insurance agent had to take photos of property and I had to sign off on roof condition (lucky here as total replacement cpuole of years prior) as well and submit to the carrier, took about 3 weeks to place and I was lucky that the old homeowners was winding up so no "uninsured" gap otherwise there would have been an surcharge. I can't imagine how much more expensive and involved this would be if the property was rented!!

Low value property in marginal areas probably can't get underwritten I'd bet.

If you are still getting this done, please pay attention to how the policy reads by name. If there is a claim, the check will be written this way. So "Jane jones" or "estate of Jane smith jones" could be more of a butt-rash to deposit & deal with than one written as Mary Jones as DPOA / or executor for Jane Smith Jones.

Also if you are doing probate & the executor, paying property taxes & having insurance coverage is very very important. If there are heirs less than excited on you being named executor as per will, and they find out you haven't paid both, they can ask for a sanction or your removal as executrix & the judge could name an administrator. not good, not pretty....
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