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Can a person on Disability Soc Sec and Medicaid participate in a reverse mortgage on family owned property

Hagerstown, MD |

My brother in law is on Disability Soc Sec and Medicaid and along with his sisters and brothers own the family home they inherited from their father. Would this lump sum distribution effect the brother in laws Social Security an Medicaid coverage.

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Posted

This truly depends on a lot of factors. You should consult with an attorney to determine what your brother in law's options are regarding this matter. The answer to your question will be based on the unique facts related to your case.

The information provided herein is general information only and not legal advice. The information provided herein does not create an attorney client relationship and is not a substitute for having a consultation with an attorney. It is important to have a consultation with an attorney as the information provided in this forum is limited and cannot possibly cover all potential issues in a given situation

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Posted

Him being on Soc. Sec. Disability is not relevant. However, to get Medicaid, your brother-in-law must keep his countable assets below $2,000. In general, a distribution from a reverse mortage is not income in the month received, but rather conversion of an exempt asset (assuming the house is already exempt); however, if the money from the reverse mortgage remains into the next month, it becomes a countable asset. Medicaid is the most complex area of law in existence, so I strongly suggest you confer with an experienced Elder Law Attorney regarding this matter.

Evan is Certified as an Elder Law Attorney by NELF (National Elder Law Foundation), which is approved by the American Bar Association, and is a member of the Council of Advanced Practitioners of NAELA (National Academy of Elder Law Attorneys). Virginia has no procedure for approving certifying organizations. NOTICE - Unless expressly stated otherwise, this communication: (1) is not legal advice absent an existing attorney-client relationship between us; (2) does not create an attorney-client relationship; (3) does not constitute an offer, acceptance, or contract amendment; (4) may contain confidential or legally privileged information protected by the attorney-client relationship and/or work product privilege; (5) is only for the use of the individual to whom it is intended by the sender to be sent, and if you are not such recipient, disclosure, copying, distribution or reliance upon this communication is prohibited; and (6) is not intended, and cannot be used, to avoid tax-related penalties pursuant to treasury department circular 230.

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Posted

The short answer is if the lender will grant a reverse mortgage and the borrowers meet age and other requirements, they can get a reverse mortgage. If the mortgage causes your brother to exceed resource limits, he loses Medicaid. An elder law attorney probably can advise on options to get the mortgage and keep Medicaid. DIY almost surely will lead to loss of Medicaid because the rules are VERY complex.

Lawrence Friedman, Bridgewater, NJ. Certified as an Elder Law Attorney by the ABA approved National Elder Law Foundation, former Chair NJ State Bar Association Elder and Disabilities Law Section, Member Board of Consultors of NJSBA Real Property, Trusts & Estates Law Section, Vice Chair Special Needs Law Section of National Academy of Elder Law Attorneys, and Master of Laws (LL.M.) in Taxation from N.Y.U. School of Law. Visit SpecialNeedsNJ.com for articles and Q&A on elder law, special needs, wills, trusts, estates, and tax. Visit SpecialNeedsNJ.com/blog and subscribe for free timely updates to be delivered to your inbox. Information on both Avvo and SpecialNeedsNJ.com does not constitute legal advice, as it is general in nature and may not apply to your situation or be subject to important changes. No attorney client relationship exists unless set forth in written engagement terms.

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