Happy Days Are Here Again. The Mail Bag Is Full Again!
Mail Bag Of Madness
(Spelling And Grammar Au Naturel!) No Animals Were Harmed Nor Any Legal Advice Given
The Door Is Shut, But A Window May Be Opened
Can I be put on a parents home with Rights of survivorship?
Hi my mom had a stroke. She’s requiring more care than I’m qualified to give. To do a longer stay in a SNF she will have to rely on Medicaid to help pay for it. I live with her in her home and have for many years. I understand they can take any money from the sale of the home if anything happens to my mom. It was recommended that my mom put my name on the house with a rights of survivorship. My mom is all for this as she wants me protected. I don’t know how to go about this or even what kind of attorney to call. Is there any advice that can be offered?
The Worst Thing About Free Advice Is That You Can’t Sue The Idiot Who Gave It To You For Malpractice
Idiotic Advice: “my mom [should] put my name on the house with a rights of survivorship.”
Horrendous Consequence #1: Medicaid Mayhem. You are being advised to have Mom deed a portion of her homestead to you. It sounds like the advice is to execute a joint tenancy with rights of survivorship deed. This will be treated as a gift. So now, the homestead that was exempt from Medicaid and would not have been “counted” as an asset against Mom is now treated, in part, as a gift, which is a divestment. Which is very bad for Mom’s Medicaid.
Horrendous Consequence #2: Divestment Disaster. When your Mom applies for Medicaid, she has to disclose all gifts made within the 60 months (also known as 5 years) before the application. Mom will then be penalized for any gifts made in this period. For every $10,000 of value she has given away, Medicaid will deny benefits for 1 month. If the house is worth $240,000 and Mom gives you half (as advised by the bonehead who suggested this idiocy), Mom just gave you $120,000. And that means that when Mom is broke and unable to pay the Skilled Nursing Facility (“SNF”), Medicaid will also refuse to pay for 12 more months. That’s right, the SNF will get no money, honey, from the Medicaid for a full year. Which is very bad for Mom.
H o r r e n d o u s Consequence #3: Debt Debacle. Mom in nursing home, aka SNF, aka Skilled Nursing Facility. Mom cannot pay bill. SNF costs $12- 15,000 per month. Which is expensive. Because running a nursing facility these days costs the teeth out of your head (as my Irish grandmother would say), and those costs are passed on to the residents (Mom)! So, in the year that Medicaid will not pay because Mom gave the homestead to you, Mom runs up a $144,000 – $180,000 nursing home bill. Which is very bad for the nursing home.
Horrendous Consequence #4: Courtroom Calamity. Nursing homes do not like it when they are not paid. It makes paying the staff and paying the grocery bills difficult. So, when Mom does not pay, the Nursing Home will wonder, “Why are we not getting paid?” And the answer will be, “Because Mom and Kid took the Town Clown’s advice to put the Kid on the deed so now Medicaid won’t pay because of the divestment. For a year!” And the Nursing Home will smile gently and say, “Oh, that’s OK! The Town Clown Advice again. That’s fine. We’ll just eat the loss and add to our bad debt account. Because when Mom can’t pay us, we can’t pay our vendors, and the vendors can’t pay their suppliers and employees. And when nobody can’t pay anybody, Everybody Wins!”
Nah. That’s not what the Nursing Home will say.
The Business Office Manager will call “Dewey, Cheatum & Howe”, the debt collector law firm the Nursing Home has on speed dial. And Mom will get sued lickety-split. And Mom will lose because she owes the money. And since the reason Mom owes the money is because Mom gave one-half of the house away to you…
You will get sued next. The Doctrine of Fraudulent Transfer says that if someone who owes money (or is about to owe money) gives away their stuff so the person to whom they owe the money can’t get the money, then they can go after the person who got the money. Clear? Excellent!
Horrendous Consequence #5: Residence Rip-off. The Nursing Home gets its judgment against you and Mom. The house gets sold. Three-quarters of the money goes to pay Dewey, Cheatum & Howe’s legal fees and the Nursing Home bill. You are out on the street. Medicaid now denies Mom because she has $60,000 left from the house sale. But no problem! When that money is down to zero, Mom will qualify for Medicaid.
H o r r e n d o u s Consequence #6: I Cain’t Get No Satisfaction! You go to the idiot neighbor, friend, relative, co- worker, busybody, or total stranger who gave you such lousy advice. You explain to that person what a confounded dunderhead he is. And they blame you for listening to their advice. They’re not responsible, they say. You should have asked that guy who writes the Michigan Elder Law Reporter, not me. It is your own fault! Harrumph! And now you feel bad. As well as being homeless.
Insightful Conclusion #1: Free Advice Is Worth What You Pay For It. When you rely on the kindness of strangers, you can get some strange results. Medicaid is complex. There are many rules that sometimes apply and sometimes do not. In today’s environment of tight budgets and strict scrutiny, Medicaid caseworkers do not let anything “slide”. Close enough for government work? Hah! You need to be correct to the penny to have any confidence when seeking benefits.
Did I mention that the rules change? Yes, they do. Every month we get written changes to the Medicaid rules, through the various Eligibility and Administrative manuals. Sometimes the changes are big. Sometimes they are small. But they all matter. And it is not just the written rules that change. Oh, my goodness no! Sometimes, the written rules stays the same, but the interpretation, the interpretation, changes.
Medicaid is worse than taxes for complexity and consequences. You would not take some bozo’s coffee talk advice doing your taxes would you? Would you?! Why do it when it comes to losing your home and lifesavings?
Hopeful Observation #1: The Good Lord Never Closes A Door Without Opening A Window. For most (all?) Medicaid challenges, problems and frustrations, there are reliable, proven solutions. That are not easy, simple, quick, or cheap.
Helpful Thought (And Still Not Legal Advice) #1: Virtue Is It’s Own Reward, But It Would Be Nice To Get The House, Too. Kids don’t provide care for parents for monetary rewards. You have not been taking care of Mom because you expect to get the house. But you do expect to get the house and there is nothing wrong with that. The good news is that you can get the home if you meet the necessary requirements and you follow the correct sequence of events.
Helpful Thought (And Still Not Legal Advice) #2: The Child Care Giver Exception. Transfers of resources for less than fair market value is divestment, which leads to penalty periods, et cetera. But there is an exception to this rule for the care giving child.
It is not divestment to
- 1. transfer a homestead
- 2. to the client’s child age 21 or over who:
- 3. lived in the homestead
- 4. for at least two years
- 5. immediately before the client’s admission to LTC or waiver approval (BEM 106), and
- 6. provided care that would otherwise have required LTC or waiver services (BEM 106),
- 7. as documented by a physician’s (M.D. or D.O.) statement.
Each of these 7 criteria must be precisely proven. Close only counts in horseshoes and hand grenades. Not Medicaid.
Optimistic Outcome: Since you have been living at Mom’s home for many years, I’m guessing that it is your permanent residence (driver’s license, voting registration, bills, work record). And since Mom now needs skilled care, I’m betting that you have been providing services for at least two years. And I’ll go further out on a limb and presume that Mom’s physician would state all the necessary facts. And so, if done correctly, Mom could transfer the homestead to you and qualify immediately for Medicaid.
Happy Ending. Mom gets the care she paid for, through her taxes, via Medicaid, the care that she needs. Nursing Home gets paid for the services it provides to Mom and can pay its staff, vendors, suppliers, etc. Dewey, Cheatum & Howe will have to find other work. Caring child who stepped up when Mom needed help (that would be you) is secure in her future. Everybody wins!
Do you know someone facing long term care? Maybe kindly-intended, ignorant, dangerous advice is railroading them to the poor house and nursing home poverty. Don’t try to give them advice yourself, but if you’d like to share my phone number:
Evaluation and Consultation Are Always Without Charge (that means free).
Find a FREE LifePlan™ Workshop Near You!
Sign up now to register for our LifePlan™ Workshop. Attend in person or watch online with our on-demand option.
No Poverty. No Charity. No Waste.
It is not chance. It is choice. Your choice.
Get Information Now. (800) 317-2812