Legal Question in Wills and Trusts in Michigan
Asset Transfer
My mother has been in on Medicaid and in a Michigan nursing home for 5 years. She was divorced for many years and low income. Her only asset, is her small home, which she has willed to her 4 children upon her death. The $1200 social security monthly which she has received upon my father's death (he never remarried), go to pay a copayment for the nursing home. We 4 children, have been struggling to pay her property taxes and water assessment each year ($5,000 annually). We have been told that Michigan is one of only a few states which do not enforce asset recovery to repay medicaid costs after a recipients death. And we have wanted to keep my mother's home as she enjoys visiting it periodically. My question is would it be legal for my mother to quick claim deed the home into her daughters's names while she is living, so that we may rent the home out for summer or weekend vacations, since it is on a lake and in a tourist town. Then we could use the money earned from rent to pay her taxes. Or could we rent the home while it remains in her name and apply any income earned directly toward her taxes, since she is allowed to have only a small amount of money on hand? Thank you for any assistance that you can give us.
1 Answer from Attorneys
Re: Asset Transfer
You are correct that Michigan does not have an estate recovery law and your mother's house, as an exempt asset during her lifetime will not (under current law - which may change) be subject to a Medicaid lien. Transferring the home during your mother's lifetime will create a divestment penalty which will disqualify her from Medicaid. However, we have helped many families with issues like the ones you raise. For example, there are special Medicaid rules that can be used to allow your mother's homestead to be converted to an income producing asset. It seems as if this may be a good option to be considered. Under any circumstances, I strongly suggest contacting a qualified elder law attorney with expertise in Medicaid rules.
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