why is it a bad idea for my mom to give me her house before she has to go into a nursing home?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
why is it a bad idea for my mom to give me her house before she has to go into a nursing home?
My dad is currently in a nursing home and his care is being funded by long term care insurance. However, we are concerned that if he outlives his insurance policy then he will have to apply for Medicaid wich will essentially make my mom is destitute. I know there is a 5 year lookback and I have read several sources that say its a bad idea for my mom to give away assets right now, however I have not really been able to find much concrete information on why it’s a bad idea or what the actual repercussions are likely to be.
Asked on June 8, 2017 under Estate Planning, Arkansas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
If she sells it to you for market value--even the low-end of what would be considered fair market value--there won't be a problem: that is a fair, "arms length" transaction where she essentially simply replaced the home with its more-or-less equal value of money, which money is available to pay for her care.
But the law does not let people going on Medicaid hide assets from the government; they have to use their own assets for the care, and can't simply let the taxpayer foot their bill while preserving their assets for themselves, their family, or their heirs. This includes transferring assets for less than market value (such as giving them away) to family members, since that is taken to be an effort to hide the asset from the government and keep it from Medicaid, preserving it in the family. Therefore, if such a below-market transfer was done during the look back period, the government can undo the transaction and take the home; in some cases, if it's concluded that you willfully tried to help defraud Medicaid, you could potentially face other liability, too.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.