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Barrister
Barrister, Attorney
Category: Estate Law
Satisfied Customers: 23810
Experience:  14 yrs estate law, real estate. Wills/Trusts/Probate
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My mother in law owns a mortgage for a home she sold. The

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My mother in law owns a mortgage for a home she sold. The payee owes $100,000 and pays her $825 per month. How does this mortgage affect her Medicaid eligibility? Does it count as an asset? Should she sell the mortgage?
Submitted: 1 year ago.
Category: Estate Law
Expert:  Barrister replied 1 year ago.
Hello and thank you for using JA! My goal is to provide you with excellent service and help with your legal problem.
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Is mother looking to apply for Medicaid to pay for some type of nursing home or assisted living care?
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Thanks
Barrister
Customer: replied 1 year ago.
Yes, it is becoming unsafe for her to live alone.
Expert:  Barrister replied 1 year ago.
Ok, there are income and asset limitations in order for someone to be considered eligible for Medicaid to pay for any health care.
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Assuming she is living alone, she can't earn more than $958 per month in order to be eligible. There is also a limit of $2000 in resources for an individual.
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So if she earns more than the $958 and has more than $2000 in assets, she won't qualify until she "spends down" her assets. This is because Medicaid is a poverty based program and if someone has assets, then the govt has declared they should pay for their own care until they are unable to before the govt will kick in to take over.
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With her owning the mortgage, I can virtually guarantee that she wouldn't qualify for benefits unless it was worth less than $2K. Even if she gave it away or sold it, Medicaid has a 60 month "lookback period" for transfers out of an applicants name. This means that they look back 5 years to see if an applicant transferred assets out of their name. If they have, then Medicaid imposes a penalty equal to the number of months that is the resule of dividing the value of the asset by the monthly care costs. For example, if a parent gives a child a $100K house 48 months ago, and care costs are $5K a month, that results in a penalty period of 20 months of denied benefits ($100K/$5K).
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I am sorry that I don’t have better news, but please understand that I do have an ethical and professional obligation to provide customers with legally correct answers, even when an answer is not favorable to the customer.

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Thanks.

Barrister

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If you need further help, just reply to me via the “REPLY” button and I will be happy to continue.

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I cannot enter into an attorney client relationship, this is a public forum, and all posts are available for public viewing. There is no duty of confidentiality that attaches to any posts. The information provided is not a substitute for a local attorney’s legal advice.

Customer: replied 1 year ago.
Would you suggest buying a Medicaid Annuity if she sells the mortgage?
Expert:  Barrister replied 1 year ago.
That would only work if she had a spouse because the payments can only go to the spouse and not be counted towards Medicaid eligibility. If another family member is the beneficiary of the payments, then this counts as a transfer of assets and disqualifies the applicant.
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The govt has thought this out pretty well as to how to bleed older people dry before they kick in to help. It is a shame that people who struggle to save a little bit to give to their children end up having to spend it all paying for care when they have already contributed to the govt their entire lives through taxes...
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Thanks
Barrister
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Barrister, Attorney
Category: Estate Law
Satisfied Customers: 23810
Experience: 14 yrs estate law, real estate. Wills/Trusts/Probate
Barrister and other Estate Law Specialists are ready to help you

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