I am worried about medicaid. She is considering selling her home soon, which I will give her all the monies from the sale of the house back to her. Will this effect her getting Medicaid in the future if she needs nursing care? OR should I legally change the deed on her home back to her before she sells?
You need to contact an attorney to see what if anything can be done.
As you will know or can imagine, Medicaid Facilities are "sometimes" less good than extended care that is self pay and chosen by a client who has sold their home and has the 500,000 to 1M to spend on their own care, self-paying. To gift a home to your child robs you of decent care at the end of life. It also will often preclude your getting any governmental help. You assets should stand to provide you care, not to be handed off to your progeny.
So see an attorney now to see how this can safely be legally undone.
If so, HOME IS NOT MOM’s. This albatross is 100% yours and you need to be the one paying for everything EVERYTHING “house”.
To me if it’s fully transferred & in your name, you have 3 choices
1. ride it out till 2029/2030 and fingers crossed your mom does not need to file for LTC Medicaid program till then & you fully plan on doing any & all caregiving for her till then if that’s what’s needed. Because it will surface to become a transfer penalty issue for her eligibility if within the 5 yr lookback that most States require. Or
2. Transfer it back & fingers crossed you do not have siblings or other family or Adult Protective Services who see the need to make you accountable for all this and have you totally removed from any decisions related to mom. If you are her POA what you did was contrary to the required fiduciary duties of a POA. You get a Real estate attorney to go over the situation and have a Realtor to the listing. Once mom has the $ then she sees a CELA level of elder law atty to guide her on how to deal with all this once she finally becomes impoverished. OR
3. you as the owner sell it; $ given to mom which becomes income to her the month paid and becomes an asset thereafter. I’d have it all shepherded by a real estate attorney to do all this and they figure out how best to legitimately place costs of selling & Act of Sale distribution done. They should have someone in the firm who can do the tax situation as well. Listing done by a Realtor. & again once mom has the $ she sees a CELA level of elder law atty….
By doing the transfer downstreams to other concerns…..
Just how was this accomplished?….. done via a Warranty Deed and recorded at the courthouse? Done via a Quit Claim Deed and recorded at the courthouse? Trying to sell a home that was NOT transferred via a Warranty Deed may be difficult as QCD title do not guarantee ownership (which a WD does). It will limit your buyers as most folks need to get a mortgage and lenders flat do not like QCD. You have to clearly let all the Realtors you speak with know exactly how title done.
So was this done by real estate attorney &/or did a Title Company review the property history & do the paperwork?
or
was paperwork pull off the web, filled in by you & mom then filed?
Was appraisal done? If not, is house value accurate as per current tax assessor bill? Fwiw Medicaid transfer penalty is going to use the tax assessor value as part of the equation on determining the penalty period should that happen.
As your mom is still alive, that title transfer has very hefty IRS tax implications. It is what FreqFlyer posted about. In general you want to always go for getting a house after they die.
If you have your own home, that property cannot get any homestead exemptions. All reductions due to mom’s ownership, age, etc all have disappeared. Property taxes will go up; could be a huge increase.
Her homeowners insurance policy too has expired. So you need to get all new property insurance & asap so there is no prolonged uninsured period of time because if there is a gap in coverage, it could be quite difficult to get property insurance on a home. In my area, almost impossible to get policies if the roof is more than 10 years old. Selling anime that has no property insurance in place will pose issues.
If you don’t mind, I’ve got to ask, why o why did you do this???
This wasn’t pulled out of the air. What did you read or program did you go to or hear that said this was the move to make to “keep the government from your elders assets”?
If you are your Mom's FPoA then you need to be extremely careful how you help her manage her financial affairs. You can't do anything that appears to be "gifting" money back and forth to her (or from her to others). If your Mom doesn't have a PoA then this is the first order of business. You can also consult with a Medicaid Planner for your state to get guidance, or an estate planner.
An option is that you don't change the title. Help her sell the house and use those funds to move into a nice reputable care community that accepts Medicaid. If she waits she may become too cognitively incapacitated to make her own decisions and will then need to rely on others, so she won't be part of her care decisions any more. Or, she may become completely uncooperative and create a nightmare for her family and/or PoA. There are plenty of posts on this forum that talk about what this scenario involves (stress!).
I wish you clarity, wisdom and peace in your hearts as you plan for the future.
On another note, it is not uncommon for a parent to give complete title over to a grown child. Except, one major problem: income taxes. If the parent gives complete title to a grown child, that grown child needs to find out how much the parent had originally paid for the house (hopefully parent kept the "settlement documents"). Then the profit from the sale of the house is figured from the date the parent had purchased the house, which could be very hefty with a large tax bill come income tax time. Even higher tax bill if the house is not the grown child's primary residence.
If the house is inherited, then the basis for figuring out the price of the house when being sold is now from the date you inherited the house (good to get an appraisal to know exactly the value of the house). Thus, a much lower tax bill.
I know, clear as mud.... (sigh)
Also, when it comes to Medicaid, there's a 5-year look back. If she recently transferred title of her house, Medicaid will take that into consideration, along with her other assets. And if the title was transferred back to your mother and she sold her home, she wouldn't be Medicaid eligible - she wouldn't qualify. Your situation should really be discussed in its entirety with an elder lawyer so you can understand how to proceed effectively and the timing of it all.