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Ray, Lawyer
Category: Legal
Satisfied Customers: 41597
Experience:  30 years in civil, probate, real estate, elder law
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A senior takes a reverse mortgage in Ohio and opts lump sums

Customer Question

A senior takes a reverse mortgage in Ohio and opts for the lump sums option drawing down all available equity at close and after the 12th month. Apparently, the lender keeps a lien against the asset to insure that they will receive the interest due upon death of the borrower and or sale of of the asset. The senior uses the funds received to travel and live better and to financialy help her children and grandchildren, spending all or most of her funds. Having "spent down" her assets she is now eligible and receives medicaid. In one, two or three years she needs and receives hospital and nursing home care.
The question: Can, would or is it likely that the medicaid recovery division of the Ohio AG's office would persue the children and grandchildren for the financial help they received?
Submitted: 1 year ago.
Category: Legal
Expert:  Ray replied 1 year ago.

Hi and welcome to JA. I am Ray and will be the expert helping you today.

There is zero chance medicaid would pursue this.A home equity loan is considered a loan and is not counted as an asset here , it is repaid at death as the lender takes the property.Medicaid here gets nothing and they have to close out their files.There is no medicaid recovery and they have no claims here at all against either kids or grandkids here in Ohio.Senior did the right thing here to use the funds while they were able.

I appreciate the chance to help you today.Please let me know if you have more follow up.Thanks again.