Currently, my 86 yo mother is in a nursing home, and doing quite well. We are private paying until her assets run out. We will have to sell her home next year, and then spend down that money before she is eligible for Medicaid. Her home needs a lot of work. It's also worth a lot more money if the work is done. Obviously, we plan to use her money to get her home ready to sell. To what degree will Medicaid scrutinize the work we have done on her house? We will keep all estimates and bills that we pay for with her money, but is Medicaid concerned with the choices we make in getting it ready to sell -- removing popcorn ceilings, re-tiling the bathroom, etc.?
But as a casual reader of property sections, I wonder if you had better spend a bit more time adding up. Property values are such a lottery anyway, houses being worth only what somebody will pay for them no matter what the pundits tell you, that you will need to be very certain that the improvements you make are going to pay for themselves.
Phewf what a project! Fingers crossed for you.
Will putting money into it guarantee that you will make it up in the sale. Some upgrading may help the house sell, but u never get that back.
Maybe just the very minimum. Sometimes paint and new carpeting help. A new kitchen floor. Actually a realtor should be able to help here.
Medicaid will allow a house but...Moms money cannot be used to keep it up. I had to let the taxes go on Moms. It also has to sell for Market Value while Moms living. You may want to consider getting Mom signed up for Medicaid before her money is gone, with the house up for sale. If the house sells while on Medicaid, Medicaid will stop and you will need to spend Mom down and reapply for Medicaid.
Maybe a Medicaid versed lawyer could help.
Here's my experience and I had a pretty laid back caseworker.
I was asked for five years of statements, I was lucky Mom kept hers that long. Of those 60 months the caseworker pulled 4 a year. I was also lucky that my bank, for a small fee, puts copies of the cancelled checks on the back of the statement. They look for consistency and any large amounts coming out of the accounts. Lets say within the 5 year look back Mom gave a someone 5k for a car or downpayment for something for them personally. Thats a no no. That money will need to be paid back or Mom would be penalized. Now if the 5k was for her, then no problem.
They are not going to say anything about what you did, it is all about the money with them.
I would print out some comps as is, then print out comps after reno's, this will show that you increased her bottom line.
Riverdale, where I live it is a seller's market, not enough inventory.
I just fixed up (remodeled) my folks home, $60k, to get $1,000.000.
Sold! What a pain. We have elder care attorney.
As poa, then executor, after their passing there's lots of rules but,
My answer is just this:
Call the State medicaid office & Ask! They will tell you everything you need to know. The rules are pretty basic.
we all get this notion that medicaid is scary to be dealing with but, I never had a thing to hide. My intentions were to preserve as much money as possible however if you want to use them, they want your mom penniless! & since they want her to spend down darn it, throw them your questions.
I did.
Goodluck
I'velearned so much.
I ended up with an inheritance that made me lose #1-medicaid or option #2 spend down $70.000.00 immediately. ....I WILL NOT LET MY STATE tell me to go broke.
🤯🤯
Get an Estimate and Labor Costs, etc....You and I both Know it Costs "Plenty" To Rehab for Mom and Dad...Put this Money away in a Safe Place for that...Rainy Day.
(my excellent elder care lawyer put our house in a trust, and per the laws now on the books, it will not go to probate when I (surviving spouse) pass away, and thus the government can't take it. You have time to look into all that.)
Grace + Peace,
Bob
The biggest problem with that, as someone else mentioned, is once she is receiving Medicaid, she will only have a small amount of her income left to spend on herself--maybe $50 a month or so--not enough to cover property taxes and home insurance, utilities, etc.
I'm wondering if some of her "spend-down" could be used to pre-pay those things in advance. That's a question for a good Elder Law attorney.
Or perhaps the house could be rented out to cover those expenses. That makes it an income-producing asset, which is also usually exempt from spend-down.
The Medicaid look-back is not as frightening as many seem to think. As long as her money was spent on her house, there will be no issue. They are only looking for money she gave away in large amounts, not money she spent.
She could have blown $5000 a week at a casino, as long as SHE did it herself. If she gave it to you to spend at the casino, that's unallowed gifting.
Not that I recommend gambling for spend-down, just giving an extreme example.
Claw back applies:
If her $ is given or gifted to someone in 'arms reach' relationship. Ex: If she sold house to you at undermarket value, Medicaide would come after you for the Claw Back If she dies within 5 years of the sale and Medicaide was paying the bills.
If you put it on the market, As Is or Improved, and sold it to me undermarket... Perhaps to pay a medical expense before Medicaide kicked in, or you didn't get Medicare to cover..so you needed $ fast...then not an issue. I am a stranger who got a good buy.
Beware of Co-mingling. If you front the money for work, file a lien, get release from contactor that they were paid by you...acting as GC. Then you have a paper trail to show you need to be paid from Mom's $ before or at closing. Just like MTG or any other contractors. You want a paper trail. You can group costs together and file 1 lien, but worth the filing fee, IMHO.
Medicaide is wanting to be sure Mom's $ are not going to family and friends pockets, to get $ down so Medicaide starts picking up the bills.
Also all her $ do not have to go to medical expenses. She can buy nice things for herself, within reason. Ex: A $500 ring, or $1,000 in new clothes. Their resale value goes towards $2,000 assetts limit.
Buying a $50,000 mink, will be Clawed Back if bought within 5 years. Because the State is not buying mink coats and paying NH bills.
Do buy that burial plot and pre-paid funeral plan now! Again funeral plot does not count if you buy it now. If you splurge on a $3,000 pre-paid funeral plan, then $1,500 will count towards assetts limit before Medicaide pays. Concept: The state is not paying for funeral luncheon. You have the option to pre-paid $20,000. Just know Medicaide will collect at sale of house, or Claw Back if $ spent within 5 year timeframe.
Hope that clarifies things.