Legal Question in Wills and Trusts in Kansas
My mother is 68 years old and expects to live another 10-15 years (based on the health of her sister who is 13 years older and going strong). My mother would like to keep her two homes in the family (a principle residence in KS and a vacation home in MO) and is concerned that if she were to enter a nursing home at some point in the future (as her own mother did), that the homes would need to be sold to pay for her care before Medicare would pick up the rest.
My question is: How can we pass the homes down to the next generation while guaranteeing that she has the right to occupy the homes regardless of what happens with the children (divorce, lawsuits, etc.). I'm aware of a 5 year look-back rule for Medicare, and it seems like we still have time because she is in excellent health. Would a Qualified Personal Residence Trust (QPRT) work in this situation? I've also thought that the properties could be put into a corporate structure, LLC or family limited partnership, and shares could be handed out each year while leaving occupancy and control of the homes with her. Any ideas on what's best? She resides in Kansas City (Overland Park, KS) and has a vacation home in Missouri.
1 Answer from Attorneys
My simple answer would be too consider having your mother look into long term care insurance. Based on your comments on her health it sounds as if she very well could qualify. If she does, for less than the cost of one month of nursing care, she will have insurance that will keep her off of welfare (Medicaid) and out of a shared room with someone she does not know (if she needs nursing care at some future time). Trying to beat the medicaid rules well in advance of the time it could be necessary is not advisable considering the changing nature of government and related programs. The QPRT and related gifting ideas are not bad, but involve gifts that create periods of ineligibility, the need for costly appraisals to substantiate the gift values, etc. I am not an insurance salesman, but can tell you with the contribution from the family (toward insurance premiums), long term care insurance is really "estate preservation" insurance. Good luck.
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