What happens if we sell a home with a reverse mortgage while on Medicaid?
My mom has been on Medicaid for years (after dad passed away in 91’).
She took out a reverse mortgage a few years later.
She owes a hefty amount on the RM but she is currently in rehab after taking her 3rd fall.
My mom has a lot of medical issues.
Cancer (untreated), asthma, spinal degeneration, mobility issues & has recently been given a “decional test” by the psych doc who diagnosed her w/dementia.
They are advising I take over as POA (which I do now have) & admit my mom to a skilled nursing / memory care facility.
I have a few questions: concerns about Medicaid & the Reverse mortgage.
According to the RM, if mom doesn’t live in her house for a certain length of time & is going to vacate to the NH, the loan will come due & the house will need to be sold to pay back her balance of what’s owed.
I inherit the house (house is in trust w/me as beneficiary), so any remaining $$ left after RM is paid goes to me.
I thought I read somewhere that if a person has a home & they need to go to a NH, Medicaid will take the home as an asset to pay for their care @ the nursing facility.
But in my mom’s case the RM bank gets 1st priority as far as getting paid.
So my question is will Medicaid come after me & try to take the money (if any) that I should get from the proceeds of selling mom’s house after paying back her RM??
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How to choose an attorney? I would check Agingcare.com for a list of attorneys with elder care expertise. Call and ask if they would do a free initial consultation. Talk to a few and see which you like and which seem to be more knowledgeable and more helpful.
Ask how long it takes to get a response when you call with questions. Some attorneys are too busy or lazy and won't bother calling you back or work on your case at all after taking your money. This happened to a couple of friends of mine. These crooked attorneys think laypeople can't do anything to them since they know the law. And they were right. My friends were too intimidated when it came to the laws and they didn't know where to file complaints or what they could do to the attorneys, so they just walked away. Each lost a few grands.
Other places I would look to find a good attorneys would be:
--ask friends and relatives. Their personal experience with a good attorney is very helpful
--call AARP
--visit a Senior center and see if there are advertisements or ask the people the run the place if they know and can recommend anyone.
Have you gotten a signed personal care agreement with your mother? Time, travel, and calls you make related to your mother's business should be covered and paid by her from the RM money. This should fall under 'financial management.'
And if so, there’s no other way we can afford to pay other then using the RM money.
You say that someone ran mom's Medicaid number and said that she was already on NH Medicaid. When did your mom submit 5 years of financial records for that to be approved? You don't think you would have gotten 10 dozen phone calls asking for help with that?
Tread very carefully, Hangjng.
https://www.agingcare.com/articles/reverse-mortgages-affect-medicaid-153250.htm
Hi Hangingon - I found this website with Q&A regarding RM and nursing home. I thought it might be useful for you to read and be prepared. Some banks may force you to sell the house sooner.
https://reverse.mortgage/leave-to-nursing-home
Also, in one of the links I gave you, it is advised that you call your state's Medicaid administrator to ask questions about your specific situation and how to stay in compliance. Since you are not planning to see an attorney, this is the authoritative place to get accurate information free of charge.
Just be careful what you say/ask. Attorneys can advise you on what to do or not do and look after your interest, you won't get that from a Medicaid administrator.
Not really angry as much as trying to emphasize some of the posters advice or info wasn’t applicable to my mom’s specific case (regarding handling her RM money & bring Medicaid compliant).
Our issues were resolved here by Polabear’s suggestions.
When you turn on the all capital letters on a blog post or other internet connection you do indicate that you feel those posters information is not helpful or to indicate anger. You did it again in your last post.
Get an eldercare attorney.
Thanks to all.
The information provided by other posters could be very relevant and helpful when it is time to sell the house. You might want to refer to their posts later on.
Also, when you call the RM bank, ask to speak to someone knowledgeable about how they handle the sale proceeds after paying off the RM loan when Medicaid is involved. You might get some good information from them.
See she never had any money accumulate at the end if the month because all she took from rm what what she needed to pay (bills) that month.
We were told that exactly what you wrote about any money my mom gets thru her RM is NOT considered an asset as long as no more then $2,000 remains in her checking account at the end of each billing cycle (30 days) or that will be considere income.
Whenever my mom has made withdrawals from RM, as soon as that money hit her account it was used, mostly to pay bills, property tax on the house, etc so that’s not an issue and it’s NEVER been an issue since 2009 or Medicaid would have discovered that & notified my mom as soon as it happened so I don’t think that’s a concern.
I will see if my mom would sign a care agreement between she & I so that will be taken care of.
Thank you so much PolarBear, you’re information has been so helpful.
Here are some examples of care that can be included in the agreement and be compensated for:
"Examples of care are: personal care, grocery shopping, preparing meals, housekeeping, laundry, coordinating household and medical bills, making phone calls, financial management, transportation (consider mileage), monitoring and managing medications, tracking changes in health, and liaison with healthcare practitioners."
I took that paragraph from this link, see paragraph #5 under "Additional Details to Consider in an Agreement"
www.caregiver.org/personal-care-agreements
Since your mom is in NH, there are fewer things that you need to do for her, but those things do require your time and you should be compensated for it. If she was a ward of the state, whoever looks after her case doesn't work for free. Right?
Three more websites, each confirms the info in the previous two that I posted links for. RM $$ is allowed as long as it's spent within the month it's received. One of the three mentions 12 months not living in the house before the bank calls the loan. Again, call your mother's bank and check.
www.naylaw.com/blog/can-reverse-mortgage-affect-medicaid-eligibility-elder-law-attorney-portland-oregon/
www.elderlawanswers.com/is-a-reverse-mortgage-right-for-you-12252
www.caring.com/questions/reverse-mortgage-mecicade-medicaire
If since April, 2013, your mom has gotten any $ from the line of credit RM, that’s loan proceeds. It needs to be reported.
Your mom paid your car note, that gifting & places a transfer penalty period for her.
What PolarBear wrote is spot on.... any $ after the month paid becomes assets. Your mom is/was on community Medicaid, if she got RM $ & had $ left in her bank account, it changed her income & assets to be truly “at need” and should have been reported to Medicaid when it first happened ages ago.
Plus she still has 40k in loan proceeds that she has available to draw on from the RM. That 40k cannot cover your living expenses. Either she needs to draw it all and use it the private pay for her care. Or close out the RM and let the 40k go against the RM - AND when her home is sold if there is any equity back to her, it’s her income for the month paid and her assets thereafter. Her name & SS# is tied to the property, it will surface. It is not your $.
If you have been self dealing with her money, this could morph into a very serious situation for you as APS can look into it & contact the court or police.
Your mom is in a NH. To me, it’s too late for personal care agreement now.
Also Medicaid requires all her income to be paid to the facility less a small personal needs allowance. So that $700 a mo in SS she gets basically goes to the NH. Have the NH explain Medicaids co pay or SOC (share of cost) requirement.
Get an attorney to review your mom’s situation before you submit anything to the NH. Your mom’s seriously ill and in a NH and unable to be competent or cognitive to do any creative Medicaid planning.
I think I have some good news for you. Here is some more info regarding Medicaid and RM. See the link below.
reversemortgageguides.org/reverse-mortgage/medicaid-and-medicare/
From what I gather, it's NOT a problem to receive $$ from RM, but the $$ has to be spent. It can NOT be put in an account and accumulate above the allowable limit because after 30 days, that money will be considered ASSETS.
More reason for you to have a personal care agreement with your mother, so she can 'legally' pay you in the eyes of Medicaid.
This will allow her to pay you from the RM money and would not cause a problem with Medicaid.
Here is a sample form from Agingcare.com
https://www.agingcare.com/documents/personal_care_agreement_AgingCare.pdf
I know you don't have money to go see an elder care attorney. It would be most beneficial and will avoid a lot of potential problems later for both you and your mom.
Short of seeing an attorney, I think you should do a lot of research online and see if you can find information relevant to your mom's situation.
I found one website which has information you should read. Look at paragraph #9.
www.bankrate.com/retirement/can-a-reverse-mortgage-impact-medicaid/
I will do some more research and will post links if I think they are useful for you.
So sorry you're gong through such a difficult time.
Do you know how long your mom can be out of the house before the bank will want to sell it? I read some where that it could up to a year, but it depends on your mom's RM terms. You should check the loan docs, or call the bank. They should talk to you since you now have POA.
If it's a good length of time, perhaps, you can move in and save money on rent?
She has dementia & wont understand what he’s saying." Does this mean that your mother is incapable of making financial decisions herself, and when you say that you're proposing that your mother "give" you money, what you actually mean is that, as her POA, you would in reality be giving yourself your mother's money? Does the POA document allow you to pay yourself? Do you have a care contract in place, and this money would cover the care you continue to give your mother while she's in the nursing home? Otherwise, there might be a question of whether or not you're fulfilling your fiduciary responsibility as POA. So, yes, I'd say that you still need to speak to an attorney.
But they did say that you only have to return the form if you answer yes to ONE of the 13 questions & we aren’t so the form doesn’t need to be sent back.
That coincides with what the admistrator at another NH told me about my mom already having the kind of Medicaid that will pay for long term NH.
Also one of the questions does ask if you have made any loans, or received any assets within the last 60 months or 5 years and that also doesn’t apply to my mom because she got her RM back in 2009 so that was 9 yrs ago.
It won’t be considered.
Whew!
Won’t have to pay to see an attorney now thank God.
I also asked her about the Medicaid application, or the different Medicaid someone on here medntioned.. community or nursing home kind & she said if you give me your mom’s Medicaid # I can check & see what she has.
She ran the # and said my mom has coverage for a nursing home & deosnt need to fill out any other forms or applications.
So since she’s already on the system, I don’t think there’s going to be any problems w/her RM & “gifting” as you all call it.
I mean understand what that is & how it’s relevant to the othe kind of Medicaid (Nursing home) but my it’s not what my mom has.
She has dementia & wont understand what he’s saying.
She is requiring 24 hour skilled nursing, not a visiting nurse 2-3 days a week for a few hours.
She can not afford to hire 3 shifts of nurses to live w/her, that would costs thousands a month.
It’s not that Medicaid will place a claim on your mom, but what can happen is that Medicaid will determine that mom is INELIGIBLE for LTC Medicaid and will place a transfer penalty due to mom’s gifting of $$ to you or whomever. The penalty is by # of days based on your states Medicaid reimbursement rate and only until the # of days are either paid or passed will she become eligible.
The super sticky in this is mom is living in the NH in order to apply for LTC Medicaid. If Medicaid determines she’s ineligible, Medicaid will NOT PAY to the NH the daily room & board rate for your mom. & Medicaid will send the letter of ineligibility due to transfer penalty to mom, to you as her dpoa and to the facility. What routinely happens is NH send out a “3O Day Notice” to you all & APS & a probono legal clinic; which morphs into NH has family (you) to sign off on a private pay contract for care in order for mom to stay; OR you move her back to live with family (NH bill still exists for her time there) or if neither happens then NH contacts APS to have mom made an emergency ward of the state with a temporary court ordered guardian placed for her & they determine what happens for mom.
If your mom’s LTC Medicaid application gets stalled, it’s panic time.
If you feel stress out now, dealing with a 30 Day will be super stress time.
Based on your posts there is gifting that’s likely to be beyond obvious for the car payments mom paid on your car. Really have mom meet with an atty & she pays for this from her RM $. Be transparent with mom’s atty as to what all she has paid for that was to keep your (not her) household afloat. Sometimes the elder & their adult child’s life is so intertwined financially to the point that the parents SS $ is the only source of steady income. It may be that mom has to move out of the NH and have family plus together to provided at home caregiving otherwise family will be homeless. Aging in America can be a harsh reality check for families. If mom goes back to her home, the RM will be ok for compliance and she will have her $700 a mo SS. The old NH bill will still be there but if she only has SS and you don’t really have an income or assets.... then little debt collections can do.
If she moves home I’d suggest Hospice should be looked at for her. It will provide help with aides 2-3 days a weeks for a few hours plus all sorts of equipment, nutritionals and at no cost as it’s Medicare.
No one is saying that you are trying to commit fraud. The thing is, mom's money is hers to do with as she pleases, except-- if she ( and you) expect the State to fund her care, she has to be out of funds. Not out of funds except what I gave my child.
I understand that this is stressful. Are you seeing your doctor? (((((Hugs)))))). Mom is in care now, and I assume she's no longer nagging you to come over all the time, so that you can work in peace.
If I lost just 1/4 of my income that would put me in the poor house & that frightens me to death because I would be evicted from my apartment & I have many animals so to live on the street wouldn’t be something I could do so where would I go??
This is so much stress & it’s affecting my health.
I already have HBP but I take meds to control it but lately I’ve been getting chest pains from all this stress, especially when I come home from seeing my mom in the rehab place.
The last thing I want to do is jeopardize my mom’s options for where she’s going to spend her last days but not only do I have to orchestrate that for her but I have this constant worry about my own financial woes..