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Irwin Law
Irwin Law, Attorney
Category: Estate Law
Satisfied Customers: 7276
Experience:  30+ yrs. handling probate estate, wills, trust, inheritance & real estate related matters
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A friend of mine could no longer afford her mortgage

Customer Question

A friend of mine could no longer afford her mortgage payments. She retired and started receiving SS benefits of a minimal amount back in 2009. I have been making the mortgage payments, taxes, etc since 2007 and in 2013 my name was put on via quitclaim deed as 50% owner (join owners). The house is worth about $350 now and the mortgage balance is $200K - which is under her name. I will be refinancing next year under my name only - since I am making all the payments.
She is 78 - My question is how does this play into the 5 year look back for Medicaid if she had to go into a nursing home?
Also - she wants to adopt me - so I will be her daughter within the next year. - not sure if that matters - but she has no family and wants to make sure that someone (me) takes care of her as she ages.
Thank you
Submitted: 7 months ago.
Category: Estate Law
Expert:  Irwin Law replied 7 months ago.

Good morning. Thanks for using JUST ANSWER . My name is***** and I'm happy to be of service. Every state has different rules and regulations concerning Medicaid qualification, so please consider this general information, rather than specific advice. The 50% deed to you is still within the five year look back period and will continue to be so for several years. If you are going to acquire 100% ownership in order to refinance it should be done as soon as possible. That can be a problem with Medicaid spend down requirement, whereas if she maintains an ownership interest in the home, it would not be considered. A written caregiver agreement for you to provide services during her lifetime, may be necessary in order to establish adequate consideration for the transfer of ownership of the property to you.

Massachusetts law regarding adult adoptions of another adult is fairly easy to understand. If you have not been on the line about that, you can see: http://bristolcountyprobate.com/adoption-adult.htm. These forms can easily be adapted to any Massachusetts County. You should consult with a local elder law specialist in your area to pin down the exact steps that you need to take to preserve the home for both of you. I cannot refer to specific attorneys, but I can send you a list of such specialists if you tell me where you live.

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Customer: replied 7 months ago.
I was not going to put the house in my name 100% i would leave as is but refinance under me. She has the mortgage under her only. I have to wait another year because i am ine year out of chapter 13 reorganization. Would it be a problem for Medicaid for her if she us still 50% owner and is house protected and they wouldn't touch it?
Expert:  Irwin Law replied 7 months ago.

In order to refinance the house, if she continues to own 50% she will have to sign off on at least the mortgage, and possibly the note 2. These asset considerations are very local, so you have to take this up with Massachusetts Medicaid to determine what their criteria is for leaving the house alone. Perhaps it can be shown that the home will be necessary for her to return to would you living there to take care of her. That might keep it out of the equation.

Customer: replied 7 months ago.
regarding medcaid is it best to leave her as 50% owner or not? Earlier you said if she maintains an intetest it would not be considered. How would you advise to protect home so medcaid wouldnt look at the home
Expert:  Irwin Law replied 7 months ago.

It would be best to transfer the remaining 50% and then wait until at least five years from the 2013 transfer to apply. Also this question should be asked directly to Massachusetts Medicaid to determine how they look at this exact situation. They can tell you what their requirements are, whereas I can only guess at them from this distance..

Customer: replied 7 months ago.
Would it be safer to put the house in a trust
Expert:  Irwin Law replied 7 months ago.

Probably not verses Mass. Medicaid if the questionnaire is accurate. It might insulate against creditors by making in immune from judgment liens.

I hope that I have provided excellent service and, if so, would love a 5 star rating. If not, please let me know how I can further assist you. There is no additional charge to you for rating me. A bonus is not required, but is always appreciated.

Thanks again for using JUST ANSWER.

Expert:  Irwin Law replied 7 months ago.

Hello again. I hope that I have provided excellent service and, if so, would love a 5 star rating. If not, please let me know how I can further assist you. There is no additional charge to you for rating me. A bonus is not required, but is always appreciated.

Thanks again for using JUST ANSWER.

Customer: replied 7 months ago.
I dont understan your last reply
Expert:  Irwin Law replied 7 months ago.

Are you confused about my reply Concerning your trust question, or is it about the rating request?

Customer: replied 7 months ago.
Trust wuestion
Expert:  Irwin Law replied 7 months ago.

Putting the property into a trust is commonly done; however, if the transfer takes place within the five year look back period, it must be disclosed on the Medicaid application. That permits valuation of the applicants interest from the standpoint of Medicaid eligibility. Putting the property into a trust in your name as trustee, would avoid a title search by creditors looking for property in your friend's name. I hope this clarifies what I said earlier.