Legal Question in Real Estate Law in California

Re: Real Estate Sale - Residence

I am quite hesitant to answer this question, because I think it requires an answer from an estate-planning lawyer rather than a garden-variety real estate lawyer as you are likely to hear from with the question posted under "real estate and real property" rather than estate planning, or whatever LawGuru uses as a topic heading for that specialty.

Over my somewhat brief career as a business and real estate lawyer, I have fielded (both in the office and on LawGuru) a number of questions about MediCal, generally asking how the prospective heirs can avoid having their inheritances sucked up by MediCal claims. I know this isn't the thrust of your question, but the issues are interrelated, and my usual answer is that MediCal is always tightening up its rules to stay one step ahead of the asset-hiding wannabe heirs.

Frankly, I think the questions you ask are very good ones that deserve a more expert answer than I am able to give, but that I can give some inconclusive preliminary observatios that may prevent your family from making a huge mistake. So, please respect my ignorance of the specifics.

First, I have a hunch that selling the house could be a mistake from a tax perspective. There is a potential capital-gains liability. With home prices falling in recent months, that may seem silly, but if your mother bought the house decades ago, it probably still has huge built-in gains that would be taxed despite the fact that she is 91. If you inherit the property, you would get a stepped-up cost basis and the family would avoid most or all of the capital-gains bite even if MediCal requires the heirs to fork over huge sums.

Finally, I am dubious about the propriety of Mom giving the proceeds of sale to you to put in a savings in your name. Your intentions may be pure, but Mom's creditors and/or other potential heirs may look at it otherwise, and accuse you of diverting funds that should have been used to pay assisted-living care costs to yourself, whether you did or not. When you consult a lawyer (which I advise) with the intent of retaining an appropriate expert to guide you through this maze), be sure to ask for an explanation of the possible significance of the Uniform Fraudulent Transfers Act to family members tapping an elderly person's assets in their own name, whatever their declared intent. This could have unnecessary bad consequences just because the process raises suspicions that you may have been diverting assets from potential tapping by MediCal (or SSI?).

The bottom line is that I don't know the best answer for you, but I hope I have at least cautioned you about some possible dangers along the path to assisting Mom.

Re: Real Estate Sale - Residence

I have just a little to add to Mr. Whipple's answer, since I have several clients with Medi-Cal coverage in an assisted care facility.

Medi-Cal will wait until your mother is deceased, and then attach (i.e. take) the value of the property.

SSI is not a worry.

As Mr. Whipple points out, there are dangers in putting the money in your care, even though your motives are superb.

You also need as power of attorney. which you can do by yourself. They are not complicated.