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socrateaser, Lawyer
Category: Legal
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Experience:  Retired (mostly)
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my 60 yrs old sister has cancer-is widowed-with 3 sons & a

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my 60 yrs old sister has cancer-is widowed-with 3 sons & a house paid up--she wants to transfer her house to the youngest to get as much govt as possivble. we know that after 5 years after reansfer the govt helps even more. the question is can a signed "contract" between the son & mon that the house will belong to the son but the mon can live in it until death rent-free be legal

What you are describing is effectively a "life estate," assuming that the son records the contract with the court/county clerk as if it were a deed. It's legal, but it won't avoid Medicaid penalties, any better than any other legal artifice.

Mother and son would be better to something called an Enhanced Life Estate Deed instead of a simple contract. The common name for this is a "lady-bird deed." The deed permits a property owner to gift property to someone else while retaining the right to remain in the property for the remainder of the owner's lifetime.

There are a number of websites that will offer you a lady-bird deed form at low cost. In my opinion, however, this particular issue should be handled by a local estate planning attorney, because unique facts can create conditions which would make the use of a lady bird deed, or for that matter, any type of transfer, usless to avoid Medicaid penalties.

For a competent estate planning attorney referral, see this link.

Please let me know if I can be of further assistance.
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