Questions from a client of mine (moving, spouse, marriage, daycare)

[Bette]

First of all, I'm a mortgage broker and client wants to purchase a home. It would be homesteaded.

She is 69. Husband is 64. He has early onset Alzheimers.

According to her, he's not too bad yet but she wants to relocate close to his friends and family.

She has been the breadwinner and has a good W2 job. She has not started SS yet but will after turning 70.
She will keep working.

She is trying to make sure no assets are in his name (5 year look back).

They sold a home November 2021 and have only until this October 2023 to buy another one due to portability on the real estate taxes. They did make money on that sale which would go into this new home. No issue there.

They have been married about 25 years. No children. It is her first marriage. Not sure if it is his or not but no children. I know that.

She has always had her own money, 401K, etc.

Would the 5 year lookback include her assets?

Should she put more down on the house?

He is not an old man; she feels she may have another 10 years with him. The disease runs in his family and they live a long time with it which means funding a memory care place may outlive her money. She is worried about that.

Her niece (age 72) lost her husband to the same disease 3 years ago. He was in memory care for 5 years. Now, Medicaid or Medicare is going after a second home she owns in North Carolina.

That is my client's worry.

Please share if you have had experience with any of this, PM me directly or post if you know someone going through this.

[mathjak107]

rules are different in each state ..

your client should be consulting an elder law attorney, not looking for a one size fits all answer on the internet for free

[rjm1cc]

The elder law attorney is the correct option. I have discussed with my attorney when just chatting and it can be very complicated so best to be safe and get professional advice.
No expertise but her assets should not be included for Medicaid.
I would agree the home goes in her name but it could be that the home could go in both names and as long as she lives in it it can not be sold for his care. Question for attorney.
Assume SHE buys the home today and tomorrow she is killed in an automobile accident. Can he still live in the home or does someone else inherit the home? In short she might not want to leave him any assets. She probably needs a trust (maybe pour over or revocable now) to protect him. My leaning would be a revocable trust set up now and she has to also pick the trustee. She should be the trustee and have no fees as long as she can do it. Husban would be the beneficiary until he dies and then assets would go however the trust stated. He (and her)should also have a will, power of attorney (today not tomorrow, this is for when he is alive) and a health directive.
He should probably apply for SS now. If not now at full retirement age. He also has to apply for medicare. Not sure of the age, probably 65 which is before the full retirement year. If he is on her employers insurance he may not have to apply but be sure to get good advice on this decision.

[Bette]

She has done a lot of the legwork; has their wills all set up, POA's, etc.

One of the reasons for the move is to be closer to HIS side of the family for help when she needs it.
She's a good person looking ahead for him.

I believe she already set up a trust - long ago but she has relatives she will leave the home to.

I've called 3 attorneys today for her that I know and had to leave messages. One of the homes she wanted just came back on the market after it fell through and now reduced 25K so she wants to know NOW.

Thanks for the response.

My husband has known her husband for 30 years; I've known her for about 10 years.
Married about 25 years.

[Jkgourmet]

Originally Posted by Bette

She has done a lot of the legwork; has their wills all set up, POA's, etc.

One of the reasons for the move is to be closer to HIS side of the family for help when she needs it.
She's a good person looking ahead for him.

I believe she already set up a trust - long ago but she has relatives she will leave the home to.

I've called 3 attorneys today for her that I know and had to leave messages. One of the homes she wanted just came back on the market after it fell through and now reduced 25K so she wants to know NOW.

Thanks for the response.

My husband has known her husband for 30 years; I've known her for about 10 years.
Married about 25 years.

You're a good person - it's very kind of you to help. But she needs an Elder Care Attorney. If/when one of the attorneys you know responds to your voicemail, as for a referral to an Elder Care Attorney. Some specialize in Medicaid issues.

I'm not endorsing this site, but it does give a pretty good education on this topic (IMO): https://www.medicaidplanningassistan...law-attorneys/

[rjm1cc]

Originally Posted by Bette

She has done a lot of the legwork; has their wills all set up, POA's, etc.

One of the reasons for the move is to be closer to HIS side of the family for help when she needs it.
She's a good person looking ahead for him.

I believe she already set up a trust - long ago but she has relatives she will leave the home to.

I've called 3 attorneys today for her that I know and had to leave messages. One of the homes she wanted just came back on the market after it fell through and now reduced 25K so she wants to know NOW.

Thanks for the response.

My husband has known her husband for 30 years; I've known her for about 10 years.
Married about 25 years.

How did she provide for her husband to have a home if she dies tomorrow. He would need a life estate in the home (this would be part of the deed) or the home shoul go into a trust etc.

Family could say he can live their but say they were sued and lost all their assets. Then husban would be out on the street. Since he has no assets would the family pay for the upkeep of the home?

[KaraG]

That's nice of you to try to help but she needs to be setting an appointment to go over this with her own attorney that specializes in this.

[Lastfire]

I was in same situation ten years ago. I moved from Colorado to Texas with diagnosed dementia husband. I went to elder law attorney - paid big bucks to set up special needs trust for husband if I were to pass first. Other strategies were suggested by the attorney. I had no problem using all the assets to care for DH but I did not want the courts involved. She needs to make an appointment TODAY with an Elder Law attorney,

[L00k4ward]

Originally Posted by Bette

First of all, I'm a mortgage broker and client wants to purchase a home. It would be homesteaded.

She is 69. Husband is 64. He has early onset Alzheimers.

According to her, he's not too bad yet but she wants to relocate close to his friends and family.

She has been the breadwinner and has a good W2 job. She has not started SS yet but will after turning 70.
She will keep working.

She is trying to make sure no assets are in his name (5 year look back).

They sold a home November 2021 and have only until this October 2023 to buy another one due to portability on the real estate taxes. They did make money on that sale which would go into this new home. No issue there.

They have been married about 25 years. No children. It is her first marriage. Not sure if it is his or not but no children. I know that.

She has always had her own money, 401K, etc.

Would the 5 year lookback include her assets?

Should she put more down on the house?

He is not an old man; she feels she may have another 10 years with him. The disease runs in his family and they live a long time with it which means funding a memory care place may outlive her money. She is worried about that.

Her niece (age 72) lost her husband to the same disease 3 years ago. He was in memory care for 5 years. Now, Medicaid or Medicare is going after a second home she owns in North Carolina.

That is my client's worry.

Please share if you have had experience with any of this, PM me directly or post if you know someone going through this.

Not clear what you mean on a”portability of real estate taxes” - selling one home and buying another within 2 years?

I could be misinterpreting you, but you know that law is gone for many years now?

You cant avoid paying capital gains by buying your next home

Now you just get $500K capital gains exclusion every 2 years for a couple or $250K per single person if the house was the permanent residence..


Another caution is about creating a certain types trust - if she thinks she needs Medicaid in the future - having house in revocable trust could actually disqualify the husband from using Medicaid nursing home.

Spendthrift trust is totally different trust she may need to provide for husband if she is incapacitated or gone.

In addition quite a few important financial details depend what state she is in.
Different states allow different amounts of assets to be kept by a spouse, etc.

If she expect to outlive him and no children to benefit maybe they should buy a less expensive home, so she wouldn’t need mortgage and it could help her avoid paying her capital gains when she has to sell and move to assisted living herself eventually as she only could exclude $250K in capital gains?

Not that it is a big issue for her, she may not care..

Anyway, my advice is to spend money she has now to buy a comfy home if that is what she really really wants.

Better yet - keep renting and spend the rest on travel, cruising, fine dining, or some things they both enjoy - as soon they may not be able to or at minimum he won’t be able to enjoy.

Being her mortgage broker goes against this sound advice - so you have conflict of interests. Hope you won’t abuse her trust.

You mean well but your knowledge could be insufficient, wrong, confusing and perhaps not in her best interests

She needs professional help, not well meaning? mortgages professional who is looking for a client and attempting to solicit advice from the internet.

She is nearly 70 - with an afflicted husband - what mortgage or “homesteading”? It is ridiculous - she will never get decent doctors, assistance in some rural locations for him; not even nearby nursing homes which may or may not accept him

Renting is better for her. She can have better access to doctors and daycare for her husband if she needs a break from caregiving and other services for him- not go into the woods

That should be your advice to her if you are honest and not praying on elderly

[Bette]

Originally Posted by rjm1cc

How did she provide for her husband to have a home if she dies tomorrow. He would need a life estate in the home (this would be part of the deed) or the home shoul go into a trust etc.

Family could say he can live their but say they were sued and lost all their assets. Then husban would be out on the street. Since he has no assets would the family pay for the upkeep of the home?

Right now, they are living with family. I think more on her side of the family. His family lives around where she is thinking of moving.