My mom used home equity loan on her current house to buy mine for me(we live next to each other). I have been paying her for around 5 years. I have paid close to $18,000 of the 30,000 I owe her. Her health is not the best and she cannot afford to pay the lawyer to put it in her trust. I want her to sign a quit claim deed and put in my name. People are telling that she shouldn't do that because Medicaid or Medicare or something like that. I have invested a lot of money into this house. All new appliances $7,000, new water heater, new furnace/central air, new wood floor in the kitchen. Besides the $18,000 that I have paid, I have probably have another $15,000 in home improvements. How can I protect my investment? It makes me just sick to think I could lose everything.
You have several components here. If you are purchasing the home from your mother (do you have a written agreement, perhaps a land contract?) then Medicaid would no be entitled to anything other than the remaining balance on the home. And it would not be wise for her to transfer her remaining interest to you since that would be considered a divestment and could disqualify her, at least for a period of time, from obtaining Medicaid in-facility benefits.
This isn't really a real estate question, better in Elder Law and Estate Planning. I'll re-post there. Your mother should consult with an estate planning/elder law attorney in your area to learn the best plan. Also, if your mother has a trust now, putting the property into that arrangement is not an expensive matter, but that doesn't necessarily solve the issue.
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You should consult with a knowledgeable elder law attorney in Michigan as soon as possible to address the various issues your question brings up.
I agree that you should consult with a lawyer, right away. There are many unstated facts and that could radically change the advice. Why does your mother need to quit claim the property to you? Is it in her name? If your mother dies and the deed is set up properly, there would be no Medicaid reimbursement, under current law. You would not want to have the deed take effect right away, however, because it would not only be considered divestment, but it would also constitute a gift to you for tax purposes. There are ways to work this out, but you need to sit down with an attorney to structure things properly.
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You need to see an elder law attorney right away. You have already done things that should have been done only after consulting with an attorney. Calling us before you do things, such as improving a house that isn't yours, will yield a much better result than doing something and then calling us. That's why we are here.
There are multiple questionable facts about this situation. I would consult an experienced estate planning attorney to resolve these issues for you and your mother as soon as possible.
I understand your fear of losing your home. There are many approaches to addressing the issue and assuring your investment does not go to waste. You or your mother should consult an attorney familiar with Medicaid law immediately because if her name is on your house and she owns her own home only her home would be an exempt asset for Medicaid purposes if she needs nursing home care. This is a complex area of law and it is well worth you spending the money for good legal advice considering your investment. Best of luck to you and mom.
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