Medicaid demands
Before my dad (in NY) became incapacitated with dementia, but started showing signs (July 03) doctors suggested we see an attorney to protect his house from being taken by Medicaid to cover the unaffordable cost of a nursing home for Alzheimer's patients. The attorney did a Deed Transfer to put the house under my name as well as my brother's and set up a a Life Estate for my father so if my father's condition improved he still had a home and also the property taxes would stay the same and not shoot up (senior tax discount) to an amount my brother and I could not afford to pay.
My father has now been in a Vets home on Long Island for 13 mos. It took 9 mos. to get him approved for Medicaid. (Doctors said he's got about 6 to 18 mos. left to live.)
After not finding any renters and becoming dangerously close to running out of money to pay the second mortgage and taxes we had no option but to sell to avoid foreclose. Miraculously, it sold in 6 mos. and Medicaid notified us within 1 week demanding 47% of the net proceeds! Since the Deed is in my name and my brothers name, we thought it was protected. What went wrong? The attorney we hired retired years ago. Do we have any options or hope other than seek counsel?
2 Answers from Attorneys
Re: Medicaid demands
when a deed separate ownership into present (life estate) and future (remaindermen) interest, each have a cognizable property right. if I am 65, and have a the exclusive right to use and possession of property, that has a value - which they figure by mortality rates / actuarial tables. they apportion the values by percentages - either the HCFA 64 tables, or the IRS Book Aleph tables. It could be that his life interest WAS worth 47%. You should consult with counsel to confirm if they are correct. At least you got the life estate deed in time to save some of it...
Re: Medicaid demands
That's tough. What seems to have gone wrong is that you sold the house; that wasn't part of the original plan. It seems to me by selling the house you essentially undid the planning which you undertook in 2003. It's a little late to be seeking counsel, but yes that's what you should do. It may be possible to allocate the sales proceeds part to dad's short remaining life expectancy, and part to your remainder interest.
Good luck.
Rick Bryan
New York, NY
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