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What if she later has to apply for Medicaid at some pointy for long term care? Will it look like she’s was trying to hide money and will I lose my investment?

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Seek the counsel of a certified elder attorney well versed on Medicaid in your moms state to guide the two of you on best practices.
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Do I sense an 'I give you a house = you care for me' arrangement being offered?

Social contracts & mixing money with family give me the heebie geebies.

I agree with 97, get legaled up.
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From your post, it sounds as though your mother effectively wants you to buy the house for the price of what is left on the mortgage. If the house is worth more than the mortgage amount, it means that she will have given you the difference in value, and it certainly will fall foul of Medicaid look-back unless she lives for longer than the look-back period (5 years?). If she stays in the house rent-free, it might provide an argument to reduce the ‘gift’, but it’s very messy. It's even messier if undocumented care by you is part of the deal.

My guess is that you wouldn’t ‘lose your investment’ if the house has been transferred into your name legally, but your mother might have to pay privately until she has spent the amount of the ‘gift’. If she has no money, then you would be expected to pay for her care, up to the amount of the ‘gift’.

This is my best guess, based on what I have learned about Medicaid from the site (ie not as a retired lawyer in a different jurisdiction). It might help you to get your head around options before you get your own legal advice. You may have to see a lawyer anyway to transfer the house legally, so definitely check with the lawyer before you go further into the idea.
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Do you want to do this? I cannot believe at 88 she still has a Mortgage? Our house was paid off before we retired. My MIL wanted to move back at one point. My DH said no problem, she could live with us but...we would have to buy a rancher (we have a split level, she had a problem with stairs) and she would get the master bedroom. BUT, we would sell our house and if the rancher cost more than we got from our house, she would pay the difference from the sale of her house. Because, he was not having a mortgage after 65.

I suggest at her age she sell her house at Market Value (Medicaid requirement) and use the proceeds to pay for a nice Assisted Living.
The taxes and upkeep she is now paying and SS can go to offset the cost of the AL.
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BarbBrooklyn Dec 2021
JoAnn, I just want to say that these days, mortgages and HELOCs are "cheap money".

So if the funds in your 401k are averaging 10% gain per year and you need to pay 22-24% income taxes on withdrawal, having a 3% mortgage is actually a good thing.
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This is not an "investment".

If you want to figure out the best way to support your mom and her finances in her old age, consult with a certified Eldercare attorney (www.nelf.org) and proceed from there.

Do not rely on what "you've heard" or "friends tell us that...".
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You definitely need the advice of an Elder Law Attorney before taking such radical actions. You could pay a heavy price, one that could harm you and harm your Mother. This is not an action to be taken without SOLID legal advice on the law in your State. And without examining the assets as they pertain to you and to your Mom. It would be VERY VERY DANGEROUS for you to proceed with this without legal advice. DO NOT go to a Forum for medical or legal advice lest you receive wrong information.
See a lawyer with your Mom in the new year. Wishing you the best.
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Gutchrn1, if the house was For Sale, and wasn't owned by your Mom, would you still purchase it?

Do you currently live in the house, or live elsewhere?

Ok, let's say your Mom puts you on the Deed with/without you paying off the mortgage. When the time comes to sell the house, the accounting works this way.... the tax bases is the price your Mom had paid for the house when she bought it. If Mom bought the house many decades ago, you could have hefty Property Gains tax to pay. Less tax if you had lived in the house for a certain length of time after your name was placed on the Deed.

If your name is not on the Deed and you didn't put a dime into the mortgage, and you inherit the house, the tax bases would be the market value of the house on the day you had inherited the house.

What is the market value of the house? I hope it is a way lot more than the balance on the mortgage. I wouldn't want to see you pay off a mortgage for a house that is "under water" meaning the loan is worth more than the house.

As other writers had answered on this thread, best to contact an Elder Law Attorney to find out what is the best route to take.
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If she's been in that house a long time, you're going to get hit hard with big capital gains tax bill when you go to sell it. It's always better to inherit a house rather than have it gifted.

I would not do it, but confer with a CPA to see how such a transaction would affect you financially.
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