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Should mom deed her house with a life estate to protect it?

My Mom is 73 and in good health. Should we put her house in my name now with a life estate for her to protect her only asset from A Medicaid lien down the rode? We live in Alabama
Status: Open    Jul 13, 2016 - 01:15 PM


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Aug 16, 2016 - 09:45 AM

Making transfers of property (even if it is just a remainder interest) are huge decisions. If your mom only retains a life estate, she will not have the opportunity to leverage the equity in her home in the event she wants to downsize. Decisions on protecting assets should be done carefully and with the guidance of a competent estate planning and elder law attorney. You need an attorney to draft the deed anyway, I would suggest discussing what other options may be available. Frequently a trust function as a more effective vehicle than using a retained life estate. As Medicaid varies from state to state, you should speak with a local (or locally licensed) attorney to assist in this matter.


Jul 14, 2016 - 12:27 PM

My mother put her home in a life trust with me as the trustee in 2005 (she was 81) upon the advice of her attorney. When my mom became unable to live at home in 2013 due to a broken bone followed by a stroke (Christmas 2012) I consulted with her attorney for advice on her finances since she'd have to go into assisted living. I was told that when her savings dwindled and she might face needing to have medicaid assistance, medicaid could put a lien against her home but upon her death the home would become my property and the lien could not be enforced. I double-checked that and it seems to be the correct answer. I'd advise getting a good elder-care attorney involved in the paperwork. I'm the only person caring for my mother's needs and have her durable POA which has been invaluable as she has lapsed into some dementia. I'd also advise having your mother automate her bill pays and placing you on her bank accounts and a credit card. When my mother became suddenly unable to handle her personal financial affairs, it was a huge help that she all of this in place. She was in good health until she was 88, then began having UTIs which impaired her mentally (who knew THAT happened??) until she had antibiotics. The UTIs cause her thinking to be impaired and probably caused her fall at Christmas. I currently rent her home to supplement her penion and SS income to afford assisted living. She will be 92 in October. it has been a hellish 3.5 years but I'm grateful she/we planned for as much as possible when she was still healthy.
Comments (3) | New Comment

By lorick123 on Jul 14, 2016 - 02:14 PM | Like (0)  |  Report

Thank you so much. Right now my mom and I are both on her deed to her house. She also has a life estate. I am on her car deed with her as well and her bank account. All this is so confusing. I met with her attorney yesterday and he was not very knowledgeable so I will take your advice and get someone who specializes in elder law. I am her power of attorney if and when she needs me and the executrix of her will. Were you on your mother's deed by yourself? My mom has only a small social security check each month. I sure would like to protect her home my Dad worked so hard when he was alive to pay for it in full. I was thinking if we redid the deed in just my name and added her a life estate and pray 5 years pass that might be my best bet. So if I'm on the deed with her and she has a life estate which means it is mine when she passes and it won't go in probate can Medicaid still put a lien on it and take it in Alabama?
Thank you so much for your answers!

By james.bertha005 on Aug 09, 2016 - 10:43 AM | Like (0)  |  Report

My Dad was facing a nursing home residency a few months ago(in Alabama), and this is what we were told- any real property he owned in his name would be subject in whole or in part(percentage of ownership if others on deed) to nursing home surrender under medicare/medicaid policies in order to compensate for debt beyond insurance charges allowed. Property ownership had to be transferred out of his name no fewer than five years to be not subject to this rule. Otherwise, only the spouse primary residence status would prevent this from happening as long as he outlived the resident. My dad was not an inhouse resident beyond the physical therapy stage, so we did not have to face the realities of property or savings loss.

By james.bertha005 on Aug 16, 2016 - 05:18 PM | Like (0)  |  Report

Should the property be placed on the market while the person is alive, or is it sold once the resident deceases in a medicaid seize senario?

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