A lien is placed on a home so that it is known that the title is encumbered with a debt that will need to be paid before the title can be transferred. This does not stop you from utilizing the house in any legal manner.
Yes, you can rent it out. But, grandma still owns it and is on Medicaid. Any rents received would be grandma's income and likely make her ineligible for Medicaid. If rented it would have to be at market rate.
Who is living in the home now? Maybe it should be sold and then proceeds used to pay for the nursing home.
From your profile: I had cared for my grandmother for years while she lived in her home. After a bad fall she was admitted to a nursing home. I've had power of attorney for some time now and want to transfer her house to a family member but she is on medicaid at this time.
New York has some laws that other states don't have. Check with an elder law attorney. Also ask this attorney about your POA responsibilities. Your job is to conduct grandma's business in HER best interest.
I beleive that if the rent money coming in is used for the house expenses (e.g., taxes, insurance, maintenance) it would not be considered as income for Medicaid eligibility. If the rent coming in is more than the expenses, then the "profit" would be considered income. https://www.medicaidplanningassistance.org/question/rental-properties-impact-on-medicaid-eligibility/
This really is an attorney question. I don't know if this estate has to file for probate, but as there is a home involved it seems it must. If there is a will there will be an executor of that will who will manage the estate (which it seems likely is only this house). The house will likely be sold to satisfy the medicaid recovery. Prior to that I think its management is in the hands of the executor. No will? Then you are down to seeing a Trust and Estate attorney to get appointed that next of kin best able to act as administrator (what happens when there is no executor; the administrator of the estate does the work). The attorney will assist and will be paid out of the estate also. But do see an attorney for advise on how to do upkeep, payment of taxes, etc on this home until final disposition. Wish you well and sorry for your loss.
Has Grandmom died since ur last post of Oct 2021? Because thats the only way NY was sble to put a lien on it. The house is for sale, correct? When my Mom got on Medicaid, I stopped paying taxes on the house. When the house got sold, the tax lien overrode Medicaid. Medicaid was second. The sale of the house covered the tax lien, Medicaid lien, and my out of pocket (I paid the utilities). There was 10k left that went to the beneficiaries.
To rent the place you will need a Certificate of Occupancy. Any violations would have to be fixed before you could rent. Then it would need to be a 30day lease based on when the house sold, they would have 30days to leave the premises. And it would need to be stipulated that with 24 hr notice the realtor can show the house. And what if the renters refuse to leave, it means eviction, a lengthy thing. May lose a buyer or two. Me, I rather just let the taxes go then deal with renters. IMO, a house sells better with no one in it.
This is why I am assuming that grandmom has passed.
"Typically, New York Medicaid will not file a lien against the property of a nursing home resident receiving Medicaid benefits until the individual's death."
Is this a convoluted plan to let a friend or relative live in the property? That could work until it doesn’t; negative cash flow or mismatched expectations can result in things going bad.
Most bona fide tenants don’t want to go to the trouble of moving in to a property they have no right to expect to live in 60 days from now. Most buyers want a property they can count on moving into at closing rather than wait to find out if they get possession or have to decide to exercise any right to cancel the purchase and start over.
Is the POA/executor/trustee trying to run up their bill? Who is being paid the property management fees, and are they 10% of rent plus ??? for getting a tenant in? Who gets paid for doing the tax planning and preparation (rental forms, depreciation recapture, estate/trust return)? Who is paid for cleaning before the tenant moves in and for yard work and maintenance while they are there (toilet leak at 10:00 p.m.?)?
If this is all volunteer work done by family, why?
First & foremost, you need to run this plan in detail by your moms LTC Medicaid caseworker to see if it even makes sense to even think about doing.
I bet it doesn’t and here’s why: - LTC Medicaid has a maximum income allowed ea month. For most states tends to be $ 2,200. Over that they are ineligible for Medicaid. - Your mom already is paid income ea month, like Social Security. Average SS is $1200 a mo. - rent is income - whatever rent on that property must be at current Market value based at Sq footage with Rental Contract. Rate not set by you. It’s market rates. Like where I live avg full 2 bd 2 ba home rents for $1800- 2,500. So even with a 10% allowance for property costs deducted, combined income of SS and rental is over the $2,200 monthly maximum. Say SS $1200 & rent $1900 less 10% so $1701 = $2901.00. Elder is now ineligible for LTC Medicaid due to too much income.
Yes LTC Medicaid allow for the elder to continue to own their home as an exempt asset for their lifetime. But due to copay of income requirements, elder has zero $ to pay any costs of the home. So they can have a trust, or Lady Bird Deed or other likely exemptions or exclusion to estate recovery BUT if you or other heirs do not yourself have wallet and sense of humor to deal with elders house for possibly years and years beyond elders grave, use your POA to sell it if at all possible.
It sounds like the plan initially was that you were going to transfer over your moms home to a family member initially and then found out that could not work because doing that would place an asset transfer on moms LTC Medicaid application. If this is accurate, please pls realize how lucky you were. You’d be stuck with this as your her POA. This site is littered with posts from a POA finding to their surprise that their 80+ yr old mom transferred her home only to find out 3-4 yrs later their now impoverished mom cannot be Medicaid eligible due to gifting her house. & that house owning family member is not answerable for any of this as mom will not file changes against that child for taking advantage of her.
what JoAnn posted on taxes is really important. If you cannot pay property taxes, let it go and taxes will come out from its Act of Sale. The only thing imo you do want to be mindful of is not to let it go to subsequent year #3 on tax delinquency as it can go to tax sale redemption for how most places run their tax sales. It mucks up the title for it to be sold. Personally I’d make sure it has its hazard insurance paid, spend the $ to keep its insurance. As your mom is still alive and still the homeowner she can still get homeowner policy which will be affordable. Otherwise you will have to go to a vacant dwelling policy and they are not cheap & basically are a fire policy. A lot of places will not underwrite vacant unless it’s got a baseline value of 300/350K, so it’s kinda important to keep that homeowner policy in force while you can. Vacant ya have to get an independent agency to find for you and they may need to actually go on site to the property & take exterior photos.
And those homeowner policies are very expensive! I had to leave my house vacant for a few months while moving to another state. That policy had a yearly premium of $4,500! Thank goodness the house sold after just a few months.
It would be nice if OP came back and told us if grandmother is alive or passed. Because Medicaid rules are different when the person is alive than they are after death.
If grandmom is alive, No you cannot rent out the house. It becomes income for grandmom. You really need Medicaid's permission.
Who is living in the home now? Maybe it should be sold and then proceeds used to pay for the nursing home.
From your profile:
I had cared for my grandmother for years while she lived in her home. After a bad fall she was admitted to a nursing home. I've had power of attorney for some time now and want to transfer her house to a family member but she is on medicaid at this time.
New York has some laws that other states don't have. Check with an elder law attorney. Also ask this attorney about your POA responsibilities. Your job is to conduct grandma's business in HER best interest.
Lots of nuisances that should be varied with grandma's caseworker so she doesn't lose her eligibility.
I, unfortunately, read the question and not the profile, I thought granny was dead.
Her still being alive adds a complexity that should not be addressed on an anonymous forum rather with her caseworker.
No will? Then you are down to seeing a Trust and Estate attorney to get appointed that next of kin best able to act as administrator (what happens when there is no executor; the administrator of the estate does the work). The attorney will assist and will be paid out of the estate also.
But do see an attorney for advise on how to do upkeep, payment of taxes, etc on this home until final disposition. Wish you well and sorry for your loss.
To rent the place you will need a Certificate of Occupancy. Any violations would have to be fixed before you could rent. Then it would need to be a 30day lease based on when the house sold, they would have 30days to leave the premises. And it would need to be stipulated that with 24 hr notice the realtor can show the house. And what if the renters refuse to leave, it means eviction, a lengthy thing. May lose a buyer or two. Me, I rather just let the taxes go then deal with renters. IMO, a house sells better with no one in it.
"Typically, New York Medicaid will not file a lien against the property of a nursing home resident receiving Medicaid benefits until the individual's death."
Is this a convoluted plan to let a friend or relative live in the property? That could work until it doesn’t; negative cash flow or mismatched expectations can result in things going bad.
Most bona fide tenants don’t want to go to the trouble of moving in to a property they have no right to expect to live in 60 days from now. Most buyers want a property they can count on moving into at closing rather than wait to find out if they get possession or have to decide to exercise any right to cancel the purchase and start over.
Is the POA/executor/trustee trying to run up their bill? Who is being paid the property management fees, and are they 10% of rent plus ??? for getting a tenant in? Who gets paid for doing the tax planning and preparation (rental forms, depreciation recapture, estate/trust return)? Who is paid for cleaning before the tenant moves in and for yard work and maintenance while they are there (toilet leak at 10:00 p.m.?)?
If this is all volunteer work done by family, why?
I bet it doesn’t and here’s why:
- LTC Medicaid has a maximum income allowed ea month. For most states tends to be $ 2,200. Over that they are ineligible for Medicaid.
- Your mom already is paid income ea month, like Social Security. Average SS is $1200 a mo.
- rent is income
- whatever rent on that property must be at current Market value based at Sq footage with Rental Contract. Rate not set by you. It’s market rates. Like where I live avg full 2 bd 2 ba home rents for $1800- 2,500. So even with a 10% allowance for property costs deducted, combined income of SS and rental is over the $2,200 monthly maximum.
Say SS $1200 & rent $1900 less 10% so $1701 = $2901.00. Elder is now ineligible for LTC Medicaid due to too much income.
Yes LTC Medicaid allow for the elder to continue to own their home as an exempt asset for their lifetime. But due to copay of income requirements, elder has zero $ to pay any costs of the home. So they can have a trust, or Lady Bird Deed or other likely exemptions or exclusion to estate recovery BUT if you or other heirs do not yourself have wallet and sense of humor to deal with elders house for possibly years and years beyond elders grave, use your POA to sell it if at all possible.
It sounds like the plan initially was that you were going to transfer over your moms home to a family member initially and then found out that could not work because doing that would place an asset transfer on moms LTC Medicaid application. If this is accurate, please pls realize how lucky you were. You’d be stuck with this as your her POA. This site is littered with posts from a POA finding to their surprise that their 80+ yr old mom transferred her home only to find out 3-4 yrs later their now impoverished mom cannot be Medicaid eligible due to gifting her house. & that house owning family member is not answerable for any of this as mom will not file changes against that child for taking advantage of her.
what JoAnn posted on taxes is really important. If you cannot pay property taxes, let it go and taxes will come out from its Act of Sale. The only thing imo you do want to be mindful of is not to let it go to subsequent year #3 on tax delinquency as it can go to tax sale redemption for how most places run their tax sales. It mucks up the title for it to be sold. Personally I’d make sure it has its hazard insurance paid, spend the $ to keep its insurance. As your mom is still alive and still the homeowner she can still get homeowner policy which will be affordable. Otherwise you will have to go to a vacant dwelling policy and they are not cheap & basically are a fire policy. A lot of places will not underwrite vacant unless it’s got a baseline value of 300/350K, so it’s kinda important to keep that homeowner policy in force while you can. Vacant ya have to get an independent agency to find for you and they may need to actually go on site to the property & take exterior photos.
If grandmom is alive, No you cannot rent out the house. It becomes income for grandmom. You really need Medicaid's permission.