Issybeau Asked May 2018
Owing money on an asset?
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My Mom and I purchased an RV for her to live in on our property. She is also on the title to our house with my Husband and I. For Medicaid, will they just say that the RV is an asset at full value or will they take into account that we owe approximately what it is worth to the bank?
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It’s got to be one or the other that is her primary residence. You have got to get your story straight and have it so that it is based on what the legal shows.
The RV and the house are assets. Even if they both are underwater, they are still assets. Medicaid really doesn’t care about debts. Medicaid is all about assets & income, her assets are required to be spent down if they are non-exempt AND her income required to be paid to the facility as her copay or SOC. If mom’s SS or any other monthly income is being used to keep your household afloat in addition to paying on whatever debt service she has (like the note on the RV), once she goes into a facility and applied for Medicaid she must have her income paid to the NH. Did the “rep” mention this to you?
Medicaid rules allow for a “home” and a car. If they review her assets and determine that she has 2 homes, she will be ineligible for Medicaid till either 1 is sold or her share of ownership is sold. If Medicaid will look at an RV as a vehicle, it will need to be within the value limit for vehicles that Medicaid has set for your state. Someone posted recently that for OH the vehicle limit was under 5k... Again Medicaid doesn’t care about debts. The RV and the house have a value and that is what Medicaid looks at. If the best option is to let the RV be repo’d so it’s no longer hers, that’s something to consider and discuss with an elder law attorney.
Really Stuff like this if & once it surfaces will be a huge issue for Medicaid which snowballs into an issue for wherever she moves into as “Medicaid Pending” as they can instead require that she be private pay till she is eligible. Or they accept her as pending but require you as dpoa to sign off to be financially responsible should she be determined ineligible. Facilities do not have to take in a resident as “Pending”.
Realize that even if she clears Medicaid, Medicaid is required to attempt to be repaid for all costs paid by Medicaid from her assets after death. It’s called MERP. The house sounds like is owned by her 50% & you/hubs the other 50%. Her 50% is subject to recovery. Really you have got to get with an atty to figure out now as to how to best position all the house costs that you & hubs end up paying will so to possibly lessen the bite of Medicaid’s MERP / Estate Recovery system. It’s not a DIY and especially not a diy if you cannot afford risk taking.
We are going to go with what we have as Mom needs to be placed NOW as she is in the hospital and neither she nor myself have any cash or access to cash to speak of for private pay. We have equity in the house, but credit scores aren't good enough to access it. We are just going to have to go for it.
I do have an advocate from the hospital who is working with us to get this expedited. She didn't seem to think we would have much trouble qualifying. Lets hope she's right!
Mom is going to need to either sell one of them at FMV ASAP. And she totally uses her % share of her ownership of the $ from the FMV sale as a spend down till she’s impoverished (under 2k in nonexempt assets & 1 property) to be eligible for Medicaid.
It kinda sounds like both the RV & the house have % ownership issues.
Just how the title reads and the mortgage reads on both will be mucho importante as to what is her $$ and what is your $$. Personally imo unless your really savvy on fine print legalities on real estate, I’d suggest mom gets an elder law atty to review all this BEFORE she ever applies for Medicaid. Especially if there has been commingling of paying any property costs. You want to get all tyat broken down and differentiated before ever even applying for Medicaid. Otherwise medicaid tends to view whatever you spent on mom’s property as done as a gift to her as a part of a sense of familial duty. Like say you paid 100% of both property taxes, although mom owes 100% on Mobile home tax and 50% on the house where you & hubs live. Really she owes you that $ but it needs to be correctly documented so no Medicaid blowback.
And as mom’s name is attached to your home it makes your home subject to any estate Recovery aka MERP done after mom dies. You need to deal with clearing up ownership issues now & beforehand of her Medicaid application. Hubs & you will be some kinda upset to find a lien or claim placed on your home due to your mom being on Medicaid. A year of LTC Medicaid could easily be a 6 figure lien. Really all of you need an atty ASAP to review all assets in advance of filing any application.
Are you and your mother both named jointly as owners on the RV title, and your mother is also a joint owner with you and hubby for your house? If so, that infers that she has ownership rights in BOTH assets.
I would think Medicaid would assume that since she appears to have a vested interest in both, they're both subject to recovery.
Igloo would be able to offer more insight on valuation issues. She's an expert on Medicaid and can address the issue of outstanding loans on property subject to Medicaid recovery. Any attempt by me would be equivalent to discussing the proverbial rocket science.