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What if mortgage is still owed but need to transition to Medicaid?

My mother in law still owes a mortgage on her house. She has Alzheimer's and may be transitioning to Medicaid soon since she will be running out of money. What can be done with her house If she goes into a nursing home? Does Louisiana law allow us to sell it and use the money to pay for her expenses? If she passes away, will we owe the state all or half of its worth since she transitioned to Medicaid?
Status: Open    Jul 30, 2016 - 11:34 AM

Medicare/Medicaid, Senior Real Estate

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Aug 03, 2016 - 07:29 AM

You can sale the house at fair market value and use that money for her care in a facility. You have to keep proof that it was sold at FMV and how the money was used so that she will not incur a penalty with Medicaid.

In Alabama, Medicaid will require the sell of the home at fair market value, unless there is a spouse or (I believe) a handicapped dependent, if she has to be placed while she is still living in the home. The money from the sale will go to pay off the mortgage, of course, and the remaining goes to cover the cost of her care.

I would just call your local Medicaid agency for your area. They should be happy to answer these questions and any others regarding her property, including vehicles. A person can still qualify for Medicaid without the sale of the house as long as you can provide proof that it is up for sale. I can't answer the question about what would happen if she passes and the property if still unsold. Your Medicaid agency would be the best to answer these questions.


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