Being Added as a Co- Owner of my Parents' House?

Yes or no?

I think I asked this a few years ago and for some reason told her I didn't want to be added. Not sure I remember why.

What are the pros and cons? It's in NY, if that matters.

There is only a $20k mortgage ( which I would not be added to) on a house worth about $350-400k.

Any input appreciated. (And, yes, I will also call an attorney). TIA

If it matters, he concerns are two- fold: 1) not allowing my sister to control anything in the event of her death and 2) wanting to protect her asset to leave us if she ever needs long- term medical care. She is under the impression that if I am on the deed to the house as an owner, they could not force her to use her house as $ in the event of high hospital bills.


I don't know about the hospital bills scenario.  Also I think there might be gift tax implications, possibly requiring a return to be filed although no tax likely due.  Definitely speak to an attorney who knows about elder law, including gift/estate tax rules (not just real estate law.)  They should also be able to advise you on other ways to protect the assets.


Your sister would probably have the right to contest the matter. Messy prospect.

Definitely call an attorney with experience in this area. The government has rules to prevent dispersement of assets solely to qualify for Medicaid . 


What about putting the house in a  Trust with you named as the trustee.  This way, you don't really own the house and, I suspect, your sister could not come after the assets.  Are you consulting with an elder attorney who works with Trusts?


The Medicaid rules require that an adult child lives with, and cares for, the parent for a period of time (it used to be a minimum of 3 years) in order to protect the house from attachment. If your name appears on the deed, and you have not lived there for the required period, then only half the value of the house can be attached.

Go see an attorney. The rules change frequently and you need someone who can navigate you through the system.


You should also consult your conscience on the ethical implications of asking the wider community, through Medicaid, to pay the hospital bills while you try to protect assets for inheritance purposes. Medicaid rules are what they are in part to try to make sure that we use our own assets to pay for care before turning to government/taxpayer assistance.


Yeah, I'll get right on that consult to my conscience. LOL

My sister will not contest. She will get her share equally and fairly just not be attached to anything that she is allowed to make $ decisions on. And if her mental health or substance abuse issues are present, she will get her share doled out in a way that protects the assets for her and her kids. She already knows this is the way the will is written for everything (not just the house). She gets it.

I obviously would not be living at their house but I guess 50% protected assets is better than nothing. They actually have amazing private insurance so I suspect she is probably worried about having enough to support the grandchildren if she were to die now (my sister is a complete mess right now so I am sure this is weighing on her mind) without me having to support them all financially.

If no debt on the house, I suppose not much downside to this. I have read capital gains may be an issue so I'd have to ask about that.

Thanks


Unless this has some terrible implications for me, I just want to let her do it. She is very dressed these days and if doesn't hurt me but gives her peace of mind, so be it. But I will call an attorney to make sure.


Consult an attorney, but the sort of situation you are describing might be better handled by transferring 100% of the house to a trust which has you as trustee, and both siblings as beneficiaries when the trust is liquidated.   Of course, that requires your mother trusting you enough to give away all ownership and control, and still subjects you (appropriately) to the long look-back period required for Medicaid.  

Also, of course, realize that your mother may need to have significant assets in her name in order to have her choice of nursing homes if she ever needs one.  

The government, appropriately, does not make it easy to go on poverty benefits in order to preserve inheritances, no matter how much the next generation needs the money.  (We also sorted through these legal and ethical issues with a parent, in the face of complex family issues)
But again, ask an attorney, rather than trying to sort this out yourself.

I am not sure I understand what you are saying about the trust with both siblings. Sounds like the exact opposite of what she wants. She wants all inheritance to go to me with me responsible for making sure my sister and her kids are cared for in whatever way makes sense. What will not ever make sense is giving my sister a large lump sum of money at one time (for example, when the house is sold)- that is in large part what she is working hard now to ensure can never happen. 



conandrob240 said:

I am not sure I understand what you are saying about the trust with both siblings. Sounds like the exact opposite of what she wants. She wants all inheritance to go to me with me responsible for making sure my sister and her kids are cared for in whatever way makes sense. What will not ever make sense is giving my sister a large lump sum of money at one time (for example, when the house is sold)- that is in large part what she is working hard now to ensure can never happen. 

Does she have a will that specifies this?  If not, she needs to (and/or a current trust that establishes the beneficiary(ies) as she desires.) What you are describing actually sounds like she wants all of you (you, your sister and the grandchildren) to be beneficiaries, but for YOU to control the distribution of the assets.  That should be able to be accomplished with the right legal wording in a will which establishes such a trust (or trusts) upon her death or by establishing a trust now and, in either case, naming you the trustee.  However consideration also needs to be given to who would take over if something happens to you as well as other planning that a good attorney should be able to help you with. 

Do not just go to the lowest priced attorney who says that they can set up a will or trust, because this stuff can be complicated and varies from state to state and you want to be sure that you/your mom get it right. 


Yes, she has a will. And, no, I don't think that's exactly what she wants. I am the sole beneficiary. It is her wish that I care for her grandchildren (my sister's kids) as the first priority especially if they are still young, going to college, needing support and so on.  And then in parallel to always do what I can to make sure my sister has a roof over her head and food to eat.


And I am actually not sure why she did it as sole beneficiary vs me as owner of a trust. She does have an attorney who she has been working this through with for a very long time.



conandrob240 said:

And I am actually not sure why she did it as sole beneficiary vs me as owner of a trust. She does have an attorney who she has been working this through with for a very long time.

In that case you need to make sure that your estate planning is in order in case something happens to you.  And that might involve some sort of trust arrangement in your plans.

Sorry if this sounds morbid, but it's important.


No, you are right. That is a component I need to get into an official will.


Even before the official will, you may want to decide whether you really want to have co-mingled money -- to me that seems like a recipe for family strife.

If I were in that situation, I think I would push hard to split it into separate pools of money (either before or after inheriting it), even if I were in charge of distributions from the one for the sister's family.  A separate pot of money simplifies record keeping and removes the sense that you are profiting if you don't give out as many distributions as desired.


Family strife indeed and the source of the strife is the reason it is being done the way it is. I am fine with that part (and I don't really have much say in how my parents write their will anyway.)
All of this makes it sound like there's some big inheritance anyway. It'll be the house, one or two used cars and possibly cash to the tune of $25k. Nothing too big. The house will be the main inheritance so I can see why she wants it protected.
I also now see a potential issue with her plan and we'd have to address in a will of my own. If I die before my husband, who gets what was hers? We'll have to spell that out very clearly or my poor husband will have to play my role with my sister- not a task anyone else should have to do!

OK, not sure about NY, but you can get put on the deed to the home. As far as shielding money in the event of nursing care, etc. I doubt it will mean much. In NJ, if you have joint ownership with rights to survivorship, the deed to the home will pass directly to the survivor and not be  included in the will. In NY , I don't know. 



conandrob240 said:

Yeah, I'll get right on that consult to my conscience. LOL


In decent industrial countries this issue does not exist. I have relatives in Europe. Everything is covered. Like education, healthcare is considered a right. The community takes care of people without impoverishing them.

Medicaid has a five year look back rule. Assets gifted to you cannot be taken provided five years passed before Medicaid is needed. If its less than five years, you have to give the gift back to the patient and the Medicaid patient then has to divest themselves of income, down to 14,000. They check this by requiring a listing of all current assets and of financial transaction statements for the previous five years.

But NY has another type of Medicaid called community Medicaid. Community Medicaid look back is three months. There you need to supply a list of all assets and financial transaction statements for the previous three month. The 14,000 rule applies. If your mother has a house or lots of money, she has to transfer it to you. Then you wait three months before applying for community medicaid.

Community Medicaid pays regular Dr, pharmacy and managed care bills. Managed care would something like VNS nursing care at home or in an assisted living facility. The NYSARC comminity Medicaid trust also uses the patients excess income to pay bills such as store, rent and utilities.

Nursing home care is not covered  by community Medicaid. If the patient has to be moved into a nursing home then regular Medicaid takes over with its five year look back.

http://www.nysarc.org/trust-services/our-trusts/community-trusts/trust-ii

Its complicated. There are many rules and regulations. Its best to use an elder law attorney to apply for and set up the Community Medicaid plan. I believe the patient needs to be disabled, a physical impediment or mental such as depression or dementia.

We used http://www.aglawnyc.com/ law firm. Their consult was free.


Very helpful. Thank you.


Definitely consult an elder care attorney.  I believe it must be your name on the deed with your mother having lifetime tenancy.  That means you can't sell the house out from under her while she is alive, but once she is dead, the house is yours and you don't have to go through probate when she dies.  It also means that at least some of the equity in the house is protected should she need medicaid to pay for nursing home care.   This is only true if she transfers the house to you 5 years before she needs the care.  The value of the cars, ira, any savings, stock etc are all part of the $14k that she is allowed to have in her name.  If she has not transferred the house, then that value would be added too and you would have to spend down the full value of all her assets until she was at 14K.  After that any income she might have, social security, pension etc. would all have to go to the nursing home except for $50/month (that's assuming she is in a nursing home paid for by medicaid).  

Also, if you do this deed transfer with her having lifetime tenancy, then if you need to sell the house before she dies and she needs medicaid to pay for her care, medicaid figures out what portion of the value of the house is her share based on her life expectancy.  That amount would have to go for her care.

If I have told you way more than you ever wanted to know or just made it all very confusing, then forgive me.  find an elder care attorney in NY who can help you.  

This kind of estate planning is better done sooner than later.  Good luck!



I'm going through the process, Medicaid spendown, with my uncle right now and the figures that I have been told are no more than 2000 in assets and that he will receive 30 per month for expenses. He is in skilled nursing care. I went with Senior Planning to do the application. They handle everything and their fee counts towards the spendown.


NY community Medicaid allows you no more than $820 a month for expenses unless you set up a Community Medicaid Trust as shown in the NYSARC link I gave previously. If you set up a trust, then almost all income can be used by the patient.

Without the trust excess income has to be given to Medicaid which is income over 820 a month. The person is expected to live on that $820 trivial amount, food, utilities, rent or house costs, credit card, etc.

With the community trust, the excess income is placed into the trust and the trust then pays the expenses using that excess income.

For example, a retiree who has income of 2,000 a month, would keep $820. The $1380 excess income which would normally be taken by Medicaid would instead be sent to the NYSARC trust by check from the retirees checking account. The trust subtracts a $75 monthly admin fee and the remainder would be used for bill payments. If the bills are less than the amount sent, the credit transfers to the next month. The only bills the trust will not pay are liquor, gifts and Medicaid reimbursable expenses.

The $820 that is not sent can be used by the retiree for any purpose, such as paying additional bills, gifts, liquor or banking it when assets are less than 14,000.


I have no clue what any if this Medicaid stuff means not do I hope to ever have to. We aren't at that point in any way ( thank God).


But because of the 5 year look-back, you need to plan for Medicaid now or you could be stuck for enormous hospital bills without the resources to pay for them.


It sucks, I know, I am working through a spend down now.  But it is something you need to take into account or you could end up with issues much more severe than who manages the money.


The numbers I quoted $14k in assets and $50 of the income can be kept is for NY for medicaid that pays for nursing home care.  Not the community trust.  @georgieboy is what you were told for a different state?

I agree with max, you need to learn about this stuff now.  My mother wanted to make sure to leave us as much as possible.  She protected her real estate, but the nest egg she worked so hard to scrimp and save almost all had to go to her care before medicaid would kick in.  This was one of the most upsetting things to her in her last weeks.  I wish I had encouraged her more to look into ways to set up college funds for her grandchildren for example.  

Anyway, if you are going to be put on the deed and put in charge of this stuff, my biggest advice to you is to learn as much as possible now.  How old is your mom?  how is her health?  Luckily my mom did the deed conversion in her 70's, 7 years before she needed help paying for nursing home care.  

Oh and don't live in denial that she won't need it because you just never know.  I never in a million years imagined my mom bedridden for the last months of her life in a nursing home. She was a strong an vital woman who was still making the 4 hour drive from her house to mine a couple of years ago.  Last June she went into the hospital and was never well enough to come home again.  She died in a nursing home a month ago.

Your family seems to look to you for the answers.  Please educate yourself  so you can adequately care for and adequate for your mom when she needs it.


Okay, but I am not sure what exact I am supposed to plan for? It is their medical and they are well versed in the plans they have and have saved as they see fit for it. They have their wills all lined up and they have a financial planner who gives them reasonable advice. They come to me if they have questions or concerns about finances and I do my best to find good info for them. There isn't much of a nest egg- they have pensions and SS that they live off of plus my dad still works. A 401k type retirement account. ( not a 401 k but similar) with again not much to be too worried about. They don't have disposable cash to set up college funds for the grandchildren. They have enough from what they get each month to live comfortably with a few nicer things and vacations each year but they don't have cash socked away. Both parents are alive and very healthy ( although I know that can end quickly ) and they are only 70 yrs old. They have excellent NY State teachers medical coverage so they are really pretty good. The house thing is just a concern for her because she knows that is really what they have to make sure the kids are okay. 



conandrob240 said:

I have no clue what any if this Medicaid stuff means not do I hope to ever have to. We aren't at that point in any way ( thank God).

None of us thought my mother was at that point in any way. She was asset rich and lived a very comfortable and independent retirement life.

Then she fell down stairs. Broken arm, displaced shoulder, hip replacement, physical therapy. The upshot was 40,000 in un-reimbursed Medical, nursing home and assisted living expenses over the next eight months.

Situations can change very quickly. Sadly, with regular Medicaid you need to plan five years ahead. If you live in a state that allows community medicaid with a shorter look back, like 3 months, then you're lucky. But even then the application process and final approval can take months.

We have 2 1/2 more years before she hits that five year standard Medicaid cutoff. Should she require standard Medicaid, such as being forced into a nursing home, before the cutoff her transferred assets will have to be returned to be given to the state and almost all her retirement income will be taken from her. She will be stripped of assets, future income and whatever dignity she has left.

Or we can skip Medicaid and pay for private nursing care. 2 1/2 years ago they wanted 375 a day. You also need to add in un-reimbursed Medical, drug and physical therapy expenses.



Isn't Medicaid for people that have no financial means, and Medicare for older folk? http://www.medicaremadeclear.com/about/medicare-vs-medicaid/

As long as one of your parents is still in the home, I believe it is off limits for Medicaid (but I'm not an expert, and it is possible that Medicaid essentially gets a deferred claim against it?).  

It seems like your parents may be decently covered except for the trade-off between potential need for long-term nursing care and the need/desire to hand down assets to heirs.   

What I've heard is that some nursing homes are going to want to see that there are assets for a significant period of residence before they have to settle for what Medicaid pays (again, I'm not an expert, but this is what I've been told)

If your parents also have long-term care insurance, all of this may be moot.  If they don't, then it becomes a trade-off between sheltering assets from Medicaid and having the assets to have a full range of nursing home options.  With the level of assets you describe, it may or may not be possible to do both, and some paid financial/legal advice seems wise to me.

conandrob240 said:

Okay, but I am not sure what exact I am supposed to plan for? It is their medical and they are well versed in the plans they have and have saved as they see fit for it. They have their wills all lined up and they have a financial planner who gives them reasonable advice. They come to me if they have questions or concerns about finances and I do my best to find good info for them. There isn't much of a nest egg- they have pensions and SS that they live off of plus my dad still works. A 401k type retirement account. ( not a 401 k but similar) with again not much to be too worried about. They don't have disposable cash to set up college funds for the grandchildren. They have enough from what they get each month to live comfortably with a few nicer things and vacations each year but they don't have cash socked away. Both parents are alive and very healthy ( although I know that can end quickly ) and they are only 70 yrs old. They have excellent NY State teachers medical coverage so they are really pretty good. The house thing is just a concern for her because she knows that is really what they have to make sure the kids are okay. 


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