You need to work directly with a trust and estate laywer. Many times, property for people in your mother's situation (and with her concerns) is placed in a trust to protect it if she gets ill. You may very well be able to act as the trustee. There is at least a 5 year look back I believe to protect it against seizure if she gets ill, so you should take action sooner than later. The trust needs to be done correctly or it will not achieve your mother's goals. If you need a referral, I very am happy to provide one.
Mr. Thomas is licensed to practice law in Massachusetts. This response is not legal advice and does not create an attorney/client relationship. This response is in the form of legal education and is intended to provide general information about the matter within the question. Often, the question does not include significant and important facts and timelines that, if known, could significantly change the reply. Mr. Thomas strongly advises the questioner to confer with an attorney to make sure he or she gets all relevant information to make informed decisions about the subject matter.
I do not recommend that your parents transfer their house to you (or anyone else). If your parents transfer their house to someone and that person gets divorced or sued, the house will be at risk to that person's creditors. Your parents should work with an elder law attorney. Your parents could establish a Medicaid irrevocable trust. They could transfer their house to the trust. The five year look back period you mention still would be applicable. Your parents could be the trustees of the trust. They would be income beneficiaries of the trust. Your parents’ issue (children and grandchildren) could be the principal beneficiaries of the trust. A Medicaid irrevocable trust would provide better asset protection.
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Consult a lawyer who specializes in Medicaid planning. The period of disqualification for transfers of the elder's assets can be known with certainty in advance. I am aware of a device that involves the transfer of the family home to the child, with the elder retaining a life estate in the home, and last I heard this type of transfer did not result in a period of disqualification for medicaid. The real experts in this are the elder care lawyers who specialize in medicaid planning, and you would do well to consult one who practices in Massachusetts.
Not legal advice as I don't practice law in Massachusetts. It's just my two cents on the facts you describe in light of general principles of law. If you need legal advice, please consult a lawyer who holds Massachusetts licensure. That's not me.
A transfer to a life estate which names a Medicaid-qualifying irrevocable trust as the beneficiary at the time of death is another alternative, provided that they have sufficient assets to get through the five-year MassHealth look-back period. This way, your parents' interests are protected, they would be able to keep any residential exemption on their property taxes, and they remain in control of the property.
Your parents need to see an elder law attorney and have their situation carefully evaluated before going any further.
E. Alexandra "Sasha" Golden is a Massachusetts lawyer. All answers are based on Massachusetts law. All answers are for educational purposes and no attorney-client relationship is formed by providing an answer to a question.