In the State of Ohio, Life Estates offer minimal protection. There is a chart under the Ohio Revised Code that shows what ownership percentage the Life Tenants still own, despite transferring the property via a Life Estate. My grandparents set up a life estate in 2005. In 2021 after my grandfather died, my grandmother needed nursing care. Despite achieving the 5 year look-back, Medicaid determined she still owned 24% of the life estate property and instructed the family to sell off her position in the Life Estate (who would buy that?) or, sell off parts of the estate until she hit 24%, spend it down, then she would become eligible for Medicaid. Life Estates used to offer protection due to Mediaid recovery rules that indicated only probated assets could be recovered against. That law changed in 2005, removing a lot of the protections Life Estates used to offer.
In Florida a life estate doesn’t allow the child or the child creditors to have any rights while the homeowner (parent) is alive and have no say at the time of sale of the home. I don’t know how it is in other States. I have very good attorneys in Florida, had a life estate, sold the house and my son didn’t have to approve it, didn’t have to sign since I retained full ownership while alive. It is very important to hire a very good attorney!
Life Estate Deed established and filed 7 1/2 years ago. No assets other than 2 old vehicles, and $200 in the bank. Tennessee I believe is an expanded recovery state. Only one parent in need of SNF Tenn Care the other parent unable to care for them due to their own health issues. Very confused if the property is safe from recovery or not.
Here is the situation my Husband is in: New York State - 1985 Grandparents inherited a house, then in 1994 gifted it to my in-laws with the Grandparents paying a gift tax to the IRS - I believe the value of the house was set at $67k for that tax. In March of 2010 my in-laws deeded (gifted) the house to their two children with a Life Use for the parents. Their father passed years ago, and my mother-in-law passed just recently, so the house is being sold - $99,500. Neither sibling lives in NY, one is in MD the other in PA. As far as I know, the parents did not pay any gift tax when they deeded the house to the kids. I suppose because they had life use? Question: how big of a mess is this going to be? LOL.
In NYS an individual does not have to pay gift tax until they have gifted over $5M during their lifetime. That's probably why no gift tax was paid. It should not be too much of a mess but feel free to call our office and we can walk you through a possible solution 518-477-6686 (This comment is for educational purposes. Not advice)
Another example where if you have money to hire an attorney then you can protect your assets. if you do not have the money to protect your assets, you are screwed.
Number 1 Install lawyers who arbiter record monitor validate and certify inheritance and legacy wealth transfers with a Pro Bono backup network and take care of mom and dad at home like they did for grandma and grandpa.
Yeah, lovely idea but have you actually been there......... Mother-in-law went down badly with dementia, wandering around her local area in a nightgown at 3.00am and getting very angry at "people " in her childhood home. Eventually after becoming doubly incontinent with terrible mood swings and totally unaware of any of her family, we had no choice but to admit defeat and put her into a care home. £1,200 a week so the family home was sold to pay for her stay which ran out after four years leading to the care home and council demanding we pay for her future care. We couldn't afford that so she was put into basic council provided care home but passed away seven weeks later. Just to put that into context, my mother-in-law looked after her own father for 23 years but it took a toll on her own life as her husband was already dead........
thank you michael . ---question- with the irrevocable trust, you stated that the medicaid 5 year lookback starts with the start of the trust. is that true just in new york?
Here's a situation. Couple buys a house and Mom, who is 87 co-signed on the loan to help the kids qualify. So, Mom is on the Mortgage and Tile to the house. Couple takes care of Mom at home but now wants to place mom in a facility. Mom has no Assets and the house has no equity. No Trust is in place... YET! So, if they place mom in a community that accepts medicaid, can the State put a lien on the kids house? Or what would the options be?
If mom is on the title of the house, she is technically part owner, and the county could place a lien against her portion of ownership of the house. If she is already in the process of qualifying for Medicaid now, there is no time to satisfy the 5 year look back if your state has that look back period for Medicaid. Whether or not the house has equity now does not matter for purposes of the lien being put on the title because the house could appreciate in value while she is receiving Medicaid creating equity that can be recaptured by Medicaid upon her passing. Also if the house has a mortgage, usually a bank will not allow it to be owned or partially owned by an irrev trust. (Comment for education. Not advice) #gfg
What if house is already in Life Estate for 14 years. Mom has to move to independent living now. If we sell house that money will then start the 5 year lookback all over? Moving from NY to PA
If the house was already gifted to you 14 years ago with a life estate for your mom, a portion of the sale processed of the house are assigned to the life estate which is paid to your mom, which gives her a countable asset for Medicaid. Since the rest of the value of the house has been out of her name for over 5 years, if your mom has to apply for Medicaid, the primary house is not a countable assets, but they can't place a lien against the property. You will have to work with an accountant or estate attorney to determine the value of the life estate that would returned to your mom upon the sale of the house. (Comment for education. Not advice)
Okay, as an adult child to a an elderly parent, It seems I would NOT want a step-up in basis! Why? Because my father primary home is also my primary, and I would rather continue with the lower property taxes, and since don't plan on selling the house for the next XX years, hence there seems no value in a step-up basis, and when and IF I decide to sell, ill be exempt 500k for it being my primary anyway. Is this correct thinking? Am I missing something?
In the State of Ohio, Life Estates offer minimal protection. There is a chart under the Ohio Revised Code that shows what ownership percentage the Life Tenants still own, despite transferring the property via a Life Estate. My grandparents set up a life estate in 2005. In 2021 after my grandfather died, my grandmother needed nursing care. Despite achieving the 5 year look-back, Medicaid determined she still owned 24% of the life estate property and instructed the family to sell off her position in the Life Estate (who would buy that?) or, sell off parts of the estate until she hit 24%, spend it down, then she would become eligible for Medicaid. Life Estates used to offer protection due to Mediaid recovery rules that indicated only probated assets could be recovered against. That law changed in 2005, removing a lot of the protections Life Estates used to offer.
Thank you for sharing!! The rules do vary a lot from state to state. (Comment for education. Not advice) #gfg
In Florida a life estate doesn’t allow the child or the child creditors to have any rights while the homeowner (parent) is alive and have no say at the time of sale of the home. I don’t know how it is in other States. I have very good attorneys in Florida, had a life estate, sold the house and my son didn’t have to approve it, didn’t have to sign since I retained full ownership while alive. It is very important to hire a very good attorney!
Life Estate Deed established and filed 7 1/2 years ago. No assets other than 2 old vehicles, and $200 in the bank. Tennessee I believe is an expanded recovery state. Only one parent in need of SNF Tenn Care the other parent unable to care for them due to their own health issues. Very confused if the property is safe from recovery or not.
Here is the situation my Husband is in: New York State - 1985 Grandparents inherited a house, then in 1994 gifted it to my in-laws with the Grandparents paying a gift tax to the IRS - I believe the value of the house was set at $67k for that tax. In March of 2010 my in-laws deeded (gifted) the house to their two children with a Life Use for the parents. Their father passed years ago, and my mother-in-law passed just recently, so the house is being sold - $99,500. Neither sibling lives in NY, one is in MD the other in PA. As far as I know, the parents did not pay any gift tax when they deeded the house to the kids. I suppose because they had life use? Question: how big of a mess is this going to be? LOL.
In NYS an individual does not have to pay gift tax until they have gifted over $5M during their lifetime. That's probably why no gift tax was paid. It should not be too much of a mess but feel free to call our office and we can walk you through a possible solution 518-477-6686 (This comment is for educational purposes. Not advice)
Another example where if you have money to hire an attorney then you can protect your assets. if you do not have the money to protect your assets, you are screwed.
Number 1 Install lawyers who arbiter record monitor validate and certify inheritance and legacy wealth transfers with a Pro Bono backup network and take care of mom and dad at home like they did for grandma and grandpa.
Yeah, lovely idea but have you actually been there.........
Mother-in-law went down badly with dementia, wandering around her local area in a nightgown at 3.00am and getting very angry at "people " in her childhood home.
Eventually after becoming doubly incontinent with terrible mood swings and totally unaware of any of her family, we had no choice but to admit defeat and put her into a care home.
£1,200 a week so the family home was sold to pay for her stay which ran out after four years leading to the care home and council demanding we pay for her future care.
We couldn't afford that so she was put into basic council provided care home but passed away seven weeks later.
Just to put that into context, my mother-in-law looked after her own father for 23 years but it took a toll on her own life as her husband was already dead........
Sorry to hear that my mom was mean all her life and turned into a sweetheart with Alzheimer’s so you never know.
thank you michael . ---question- with the irrevocable trust, you stated that the medicaid 5 year lookback starts with the start of the trust. is that true just in new york?
Hi Mary. The 5 year lookback period for NY begins when the house is officially gifted to the trust (Comment is for education. Not advice)
This was very helpful.
Here's a situation. Couple buys a house and Mom, who is 87 co-signed on the loan to help the kids qualify. So, Mom is on the Mortgage and Tile to the house. Couple takes care of Mom at home but now wants to place mom in a facility. Mom has no Assets and the house has no equity. No Trust is in place... YET! So, if they place mom in a community that accepts medicaid, can the State put a lien on the kids house? Or what would the options be?
If mom is on the title of the house, she is technically part owner, and the county could place a lien against her portion of ownership of the house. If she is already in the process of qualifying for Medicaid now, there is no time to satisfy the 5 year look back if your state has that look back period for Medicaid. Whether or not the house has equity now does not matter for purposes of the lien being put on the title because the house could appreciate in value while she is receiving Medicaid creating equity that can be recaptured by Medicaid upon her passing. Also if the house has a mortgage, usually a bank will not allow it to be owned or partially owned by an irrev trust. (Comment for education. Not advice) #gfg
Very good question
What if house is already in Life Estate for 14 years. Mom has to move to independent living now. If we sell house that money will then start the 5 year lookback all over? Moving from NY to PA
If the house was already gifted to you 14 years ago with a life estate for your mom, a portion of the sale processed of the house are assigned to the life estate which is paid to your mom, which gives her a countable asset for Medicaid. Since the rest of the value of the house has been out of her name for over 5 years, if your mom has to apply for Medicaid, the primary house is not a countable assets, but they can't place a lien against the property. You will have to work with an accountant or estate attorney to determine the value of the life estate that would returned to your mom upon the sale of the house. (Comment for education. Not advice)
Okay, as an adult child to a an elderly parent, It seems I would NOT want a step-up in basis! Why? Because my father primary home is also my primary, and I would rather continue with the lower property taxes, and since don't plan on selling the house for the next XX years, hence there seems no value in a step-up basis, and when and IF I decide to sell, ill be exempt 500k for it being my primary anyway. Is this correct thinking? Am I missing something?
This is exactly my situation. Please post if you ever get a clarification.
Do you do any consulting?
You like scaring seniors You're a class act some job you got😂😂😂😂😂
Can rental proptery be put into a medicaid irrevocable trust?
Do you give any consulting?
Yes, if you go to our website, on the contact page, you can book a commentary consult call. Www.greenbushfinancial.com
#gfg
End robocalls take back your phone text protest these channels we can beat them at their own game FIGHT THE POWER😅