She is going to use the money to pay for her medical care. After the money is gone then medicare will kick in and pay her medical bills. I am concerned that the governement will go back and see how much she sold the house for and tell her that it wasn't enough. Any ideas?
2007-07-31 09:59:33 · 8 answers · asked by Jennifer L 1 in Business & Finance ➔ Insurance
We are looking to buy the house for about 100,000. The market value is about 130,000. We are trying to help her, but not put ourselves in a financial mess.
2007-08-01 05:19:47 · update #1
Also, there are major repairs needed, a new roof ect that we are going to have to fix immediately.
2007-08-01 05:23:38 · update #2
I believe you meant to say Medicaid will kick in and pay. Assets have no bearing upon Medicare. Medicare doesn't pay for assisted living, Medicaid will in some cases.
The state will not allow her to spend down her assets by selling the house for much less than market value. There is a look back period of three years so if you do purchase the home make sure she has enough for those three years.
2007-07-31 10:54:34 · answer #1 · answered by Zarnev 7 · 1⤊ 0⤋
As long as the money she made on her house is not transferred in any way to friends or relatives and they can see how the money was spent they won't cause any problems. Generally they make a person sell their house/assets for what the market will pay. If she sold it for an unusually low price to family you'd have a problem.
In the end, they will have her "spend down" to a certain government dollar limit. All of that spend down has to be spent on her. Not necessarily on medical needs but comfort items such as a comfortable bed, chair, TV etc. After that medicaid/medicare will take over. All she can have in savings is a small amt. of money for burial. It doesn't cover a funeral so that should be dealt with before she gets to that point. Sorry, this isn't a topic with any place for self respect or caring for our elderly. To the government,business is business. Try to bring up things gently,especially funeral arrangements, for her. I've done this with my mom and had to deal with it with many wonderful people who were my patients.Good luck, she's lucky to have someone looking out for her.
2007-07-31 10:50:25 · answer #2 · answered by Jo 3 · 0⤊ 0⤋
You need to price this as though it is an arms-length transaction or else it could be considered a partial gift. Not only would the value of the gift be counted against Medicaid, but she would be subject to gift tax if it is over $12000 (this year).
The Deficit Reduction Act basically made the look back 5 years on gifts and trusts.
BTW, she should not be required to sell the house to qualify for Medicaid. Talk with an elder law attorney - you may not be benefiting her by buying the house at all.
2007-08-01 07:24:19 · answer #3 · answered by aaron p 5 · 0⤊ 0⤋
See if you can pay taxes on the market value of the house while excepting a gift for less than the market price. Depending on what state you live in it would go something like this. Market value is $100,000 for Mammaws house. You pay 8% (8,000) to the state of Mammaw and buy the house from Mammaw for $1000 dollars which happens to be the lowest selling price for a house in Mammaws state before it counts as a gift and Mammaw gets penialized.
2007-07-31 10:11:15 · answer #4 · answered by joshua_phillips12 1 · 0⤊ 1⤋
Yes, the government can do such a thing. Assume that Grandma sold you her house for $1. They're not going to tolerate that and then pick up her medical bills out of 'need', since she's given you a valuable gift.
You will need to purchase Grandma's house at market value, or very close to it in order to avoid a problem for Grandma.
2007-07-31 10:03:53 · answer #5 · answered by acermill 7 · 2⤊ 0⤋
Anything that she owes will have to be paid by the estate before any of the heirs can divide up what she owns. This is called "settling of the estate." Whoever was in the will as executor of the estate will be responsible for selling what she owns and paying off the bills. If she did not list an executor or have a will, it all gets to go to probate and handled by the courts and takes forever. You'll have to list in the paper that anybody who is owed money by her will need to submit a claim, etc, etc, etc.
2016-05-19 01:24:11 · answer #6 · answered by ? 3 · 0⤊ 0⤋
Well, medicaid won't PAY until five years after the transfer of the property. So unless she's got massive other assets, your "plan" to sell the house for $1 or so isn't going to work - lots and lots of other people have tried to get welfare insurance (which the working person pays for), and "hide" assets by selling them dirt cheap or giving them away.
2007-07-31 12:01:56 · answer #7 · answered by Anonymous 7 · 0⤊ 0⤋
Living Trust.
2007-07-31 10:07:24 · answer #8 · answered by Anonymous · 0⤊ 0⤋