What to do with Aunt's house

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lovejoypeace
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What to do with Aunt's house

Post by lovejoypeace »

My aunt is in a nursing home. She is 82 years old and really has no health issues; however, she pretty much refuses to get out of the bed. The only daily activity she can perform for herself is she can feed herself. But honestly, she has longevity in her genes and could live another 10-15 years.

She owns her home and I recently purchased a 1% interest in her house to avoid it being taken by medicaid. Currently she has enough money to pay for her nursing home care for about a year and a half so she is not on medicaid at the moment.

She wants to go home but has no one to care for her there. The nursing home cost is much less than what it would cost for her to have 24 hour care and I am not in a position to be able to arrange 24 hour care for her. I am her POA and she really has no one else. She has difficulty acknowledging that she can't go home.

My dilemma is what to do with her house. I can't sell it in clear conscience while she is alive. It needed a roof about 5 years ago. It also needs new siding, windows, flooring, and to be painted. The house would make a good rental but it is old. I am unsure if fixing it up in hopes to rent it would be worthwhile.

On the other hand, the house sits on a one acre lot in a good location and would be a nice spot for a convenience store, restaurant, storage units, etc. But I have no idea what would be involved in demolishing the house and selling/leasing/managing storage units.

At this point, her house is just storing her stuff and if we are going to keep the house, the roof needs to be replaced within the next three months. I feel like I need to make a decision about what to do with the house before we put much money in it. I would hate to spend $20,000 on it and it become a money pit. Any advice?
Carefreeap
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Re: What to do with Aunt's house

Post by Carefreeap »

The house is going to need to be sold or rented if she's going to run out of money in 1.5 years. Medicaid is going to force her to use her assets before they will step in to pay. What's the current monthly cost for the nursing home?

I'd interview three agents and get their opinions on FMV for both rent and sale. Once you get those numbers come back and update this post.

Since you're a POA you might be able to get some kind of home improvement loan to do the roof but I really don't understand the 1% interest. I suspect that muddies the water more than helps. Sounds like your Aunt is still o.k. mentally. Do you think she could understand the need to get a loan to repair the roof?
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Jack FFR1846
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Re: What to do with Aunt's house

Post by Jack FFR1846 »

I disagree that she's fine mentally. Her only activity currenly is that she eats. Have a doctor evaluate her. If she is incompetent, have her legally declared so.

I also don't get the 1% ownership in the house. If she is in a nursing home, why shouldn't the house be sold to pay for her care?
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Topic Author
lovejoypeace
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Re: What to do with Aunt's house

Post by lovejoypeace »

Carefreeap wrote:The house is going to need to be sold or rented if she's going to run out of money in 1.5 years. Medicaid is going to force her to use her assets before they will step in to pay. What's the current monthly cost for the nursing home? Monthly cost for nursing home is $5400.

I'd interview three agents and get their opinions on FMV for both rent and sale. Once you get those numbers come back and update this post. Just my opinion, the house as is would be worth about $60,000. Fixed up, it could go for about $90,000. Rental would be about $750 per month.

Since you're a POA you might be able to get some kind of home improvement loan to do the roof but I really don't understand the 1% interest. I suspect that muddies the water more than helps. Sounds like your Aunt is still o.k. mentally. Do you think she could understand the need to get a loan to repair the roof?
As I understand it from the attorney, the purpose of my buying the 1% interest is that since it is a jointly held asset, medicaid can't touch it. Right now, we don't need a loan to replace the roof. She has enough $$ to pay for it. I just don't want to put money into the house if it's not going to be worth it.
Jack FFR1846
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Re: What to do with Aunt's house

Post by Jack FFR1846 »

$5600 is amazingly cheap. My wife's aunt was run over by a truck and in a nursing home in Mass for a couple months at $12,000 a month then more months in a rest home at $6000 a month. My wife was POA. Since the aunt was mentally competent, she was not allowed to sell her very unsafe house.
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dolphinsaremammals
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Re: What to do with Aunt's house

Post by dolphinsaremammals »

I had a new roof put on my house/garage a few years ago, $7000. The two story house footprint is about 800 sq ft and the garage is two car. High quality wind resistant hurricane shingles.

I don't understand your aunt's physical situation. Could she get out of bed, walk, do some chores if she had physical therapy? Is she afraid that if she gets out of bed she'll fall?
Last edited by dolphinsaremammals on Fri Feb 20, 2015 4:03 pm, edited 1 time in total.
Topic Author
lovejoypeace
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Re: What to do with Aunt's house

Post by lovejoypeace »

I'm not looking to sell/rent/demolish the property until my aunt dies, and she could even outlive me! My question is if I should prepare to rent it (fix it up) or let it fall in disrepair.
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lovejoypeace
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Re: What to do with Aunt's house

Post by lovejoypeace »

dolphinsaremammals wrote: I don't understand your aunt's physical situation. Could she get out of bed, walk, do some chores if she had physical therapy? Is she afraid that if she gets out of bed she'll fall?
I don't understand her physical situation either. I think if she had some therapy she could do more things but she is perfectly happy to lie in the bed all day. When she was younger and worked, she would go to work and come home and lay in the bed all weekend. She says she has taken care of others all her life and now it is time for her to be taken care of. She got taken to the nursing home from the hospital and refused to do therapy when she arrived. Shortly after she got there, her son passed away. He had been taking care of her at home so when he passed, she had no one to care for her. She is being treated for depression but the fact is she was never an active person and has no desire to do things for herself.
ddunca1944
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Re: What to do with Aunt's house

Post by ddunca1944 »

I had a similar situation with my late MIL. We had to move her into an adult family home because she could not physically care for herself. She deluded herself that she could "go home" pretty soon. It became obvious that she would not be able to live alone, but she stubbornly clung to the idea. I sat down with her, my husband (her son), my BIL (her other son) and BIL's wife. Each of us gently explained the realities to her until she tearfully agreed to sell it. We had a contract ready for her to sign.

Is there anyone your aunt will listen to? There is strength in numbers. Ideally you'd want to pursuade her to agreeing to sell, but since you have POA, assuming you are acting in her best interests, why not go ahead and list it if she continues to refuse to sell it. A house sitting by itself, unoccupied, is a magnet for vandalism and/or theft.
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lovejoypeace
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Re: What to do with Aunt's house

Post by lovejoypeace »

Does anyone know if I could rent out the house while she is on medicaid? Could I use the funds received by renting it to fix it up (siding and windows could wait) or would I need to use the full amount of the rent received to pay for her care?
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sdsailing
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Re: What to do with Aunt's house

Post by sdsailing »

aprilcpa wrote:

She owns her home and I recently purchased a 1% interest in her house to avoid it being taken by medicaid. Currently she has enough money to pay for her nursing home care for about a year and a half so she is not on medicaid at the moment.
This is state dependent, have you consulted a lawyer regarding this strategy? In the states I am familiar with, this strategy would not work. Be careful.
Carefreeap
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Re: What to do with Aunt's house

Post by Carefreeap »

aprilcpa wrote:
Carefreeap wrote:The house is going to need to be sold or rented if she's going to run out of money in 1.5 years. Medicaid is going to force her to use her assets before they will step in to pay. What's the current monthly cost for the nursing home? Monthly cost for nursing home is $5400.

I'd interview three agents and get their opinions on FMV for both rent and sale. Once you get those numbers come back and update this post. Just my opinion, the house as is would be worth about $60,000. Fixed up, it could go for about $90,000. Rental would be about $750 per month.

Since you're a POA you might be able to get some kind of home improvement loan to do the roof but I really don't understand the 1% interest. I suspect that muddies the water more than helps. Sounds like your Aunt is still o.k. mentally. Do you think she could understand the need to get a loan to repair the roof?
As I understand it from the attorney, the purpose of my buying the 1% interest is that since it is a jointly held asset, medicaid can't touch it. Right now, we don't need a loan to replace the roof. She has enough $$ to pay for it. I just don't want to put money into the house if it's not going to be worth it.
Letting it sit vacant until she dies is not a viable solution. As one poster already mentioned, an empty house is a vandal magnet. Also many insurance companies will not insure a house that sits vacant for more than 30-60 days.

I think you should get bids for the roof. The windows unless they are broken or not operating probably don't need to be replaced for a rental. Can the siding be repaired rather than replaced?

I'd still get the opinion of three real estate agents. They should be able to advise you about the viability of residential vs commercial based on what the property is currently zoned.
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ourbrooks
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Re: What to do with Aunt's house

Post by ourbrooks »

aprilcpa wrote:
dolphinsaremammals wrote: I don't understand your aunt's physical situation. Could she get out of bed, walk, do some chores if she had physical therapy? Is she afraid that if she gets out of bed she'll fall?
I don't understand her physical situation either. I think if she had some therapy she could do more things but she is perfectly happy to lie in the bed all day. When she was younger and worked, she would go to work and come home and lay in the bed all weekend. She says she has taken care of others all her life and now it is time for her to be taken care of. She got taken to the nursing home from the hospital and refused to do therapy when she arrived. Shortly after she got there, her son passed away. He had been taking care of her at home so when he passed, she had no one to care for her. She is being treated for depression but the fact is she was never an active person and has no desire to do things for herself.
More than likely, the depression is what is keeping her in bed. If it were just that she preferred to lie in bed, why would she want to go home? Treating depression in someone that age can be a tricky business because you may not be able to use the strengths of medications that you would with a younger person and it may take awhile to find something which works. You need to talk to her psychiatrist or geriatrician to find out what they think and what the likely prognosis is before you take any financial action.
ShiftF5
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Re: What to do with Aunt's house

Post by ShiftF5 »

aprilcpa wrote:Does anyone know if I could rent out the house while she is on medicaid? Could I use the funds received by renting it to fix it up (siding and windows could wait) or would I need to use the full amount of the rent received to pay for her care?
You might want to check with another attorney about the 1% business on the house regarding Medicaid.

I'm not sure that sounds right.

I am not an attorney nor do I know anything about elder law, but I've researched the Medicaid elder care payment issue a bit.

Please discuss this with an attorney specializing in elder care.

Best wishes
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lovejoypeace
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Re: What to do with Aunt's house

Post by lovejoypeace »

ShiftF5 wrote:
aprilcpa wrote:Does anyone know if I could rent out the house while she is on medicaid? Could I use the funds received by renting it to fix it up (siding and windows could wait) or would I need to use the full amount of the rent received to pay for her care?
You might want to check with another attorney about the 1% business on the house regarding Medicaid.

I'm not sure that sounds right.

I am not an attorney nor do I know anything about elder law, but I've researched the Medicaid elder care payment issue a bit.

Please discuss this with an attorney specializing in elder care.

Best wishes
An attorney who specializes in elder care is the one that suggested this. We live in NC. Should I do further investigation?
Carefreeap
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Re: What to do with Aunt's house

Post by Carefreeap »

aprilcpa wrote:Does anyone know if I could rent out the house while she is on medicaid? Could I use the funds received by renting it to fix it up (siding and windows could wait) or would I need to use the full amount of the rent received to pay for her care?
I missed this post. The income limits are going to vary by State and maybe by County. There are both asset and income limits. My dad is on the poverty level Medicaid program in CA and it's a tricky business. I did find out just by googling and making some calls that there is a free legal aid program in his county (San Diego) that will review a case for free.

You should investigate further. Many states, including CA have what's called a claw-back process. Although they won't take the house when your Aunt is alive they will make a claim against her estate after she dies. At $5+k/mo that money will go fast. Please seek appropriate legal counsel.

As an example:
http://www.elderlawanswers.com/medicaid ... iens-12018
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treciegal
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Re: What to do with Aunt's house

Post by treciegal »

aprilcpa, If it is determined that she is competent and could go home if there was care for her 24/7 or ever how many hours a day -
Why not move her back, let her get a HUD approved reverse mortgage and use the money to pay for her (custodial / personal) care.
If she outlast it, then there would be no problem with her being qualified for Medicaid coverage in a Long Term Care facility.

She has to be living in the home to get the reverse mortgage.

I too an questioning the advice you got on the 1% ownership -
I believe that the only way a home could be saved from any Medicaid attachment is if there is someone,
like a spouse or child, disabled son or daughter, etc., living in the home.
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lovejoypeace
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Re: What to do with Aunt's house

Post by lovejoypeace »

I went straight to the NC Adult Medicaid manual and found the following:

4. Non-Countable Ownership Interests
c. Tenancy-in-common ownership in real property, including tenancy-in-common remainder interest.


I purchased (at FMV) my 1% interest in her home, therefore making us tenants in common and as such, it seems my attorney's advice is good.

I also found other attorney's websites in NC that say this is a viable medicaid planning option in NC.
choices
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Re: What to do with Aunt's house

Post by choices »

I do not understand why she/you do not want to use her all her assets to pay for her care. When she runs out of money, there is always Medicaid.
treciegal
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Re: What to do with Aunt's house

Post by treciegal »

aprilcpa wrote:I went straight to the NC Adult Medicaid manual and found the following:

4. Non-Countable Ownership Interests
c. Tenancy-in-common ownership in real property, including tenancy-in-common remainder interest.


I purchased (at FMV) my 1% interest in her home, therefore making us tenants in common and as such, it seems my attorney's advice is good.

I also found other attorney's websites in NC that say this is a viable medicaid planning option in NC.
Yes, it sounds as such in NC - similar to life estates.
However, it appears that the transfer of this 1% is still under the 5-year Medicaid look-back rule. So if she has to have Medicaid living assistance, in a nursing home or under some other applicable program, during this 5-year look-back period, there will be a calculation applied to it for her Medicaid eligibility (amount); until the assigned amount is spent.

As far as you doing something with the home to produce income - according to NC,under this joint tenancy 1%, it is not yours until she dies so any income that it might produce will count towards her eligibility into the Medicaid Long Term Living programs of several different varieties - Long Term Care facility, PACE, etc.

I think you need to get some advice from a NC eldercare attorney.
Or better yet, get her a HUD approved reverse mortgage (you can do this as her POA), move her back home, and get her the care that she needs to stay there as long as possible; maybe for the rest of her life. It is her 99% asset; why save it when she want to go back home for her life.
HUD Home Equity Conversion Mortgages for Seniors (HECM) http://portal.hud.gov/hudportal/HUD?src ... m/hecmhome
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lovejoypeace
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Re: What to do with Aunt's house

Post by lovejoypeace »

My biggest thing about bringing her home is that I cannot coordinate her care. I have a job and a family (including 2 young kids). If someone doesn't show up to watch her, I can't always drop everything to stay with her or try to find a replacement. When she was at home with her son, they still had people coming for 12 hours a day to help. The nursing home has said they will not release her unless they have proof she has 24 hour care. According to my aunt, she only needs someone to change her diaper. She does not realize she can't cook her own meals, give herself a bath, administer her meds, etc. I know it sounds terrible, but I just can't take that responsibility.
ShiftF5
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Re: What to do with Aunt's house

Post by ShiftF5 »

treciegal wrote:aprilcpa, If it is determined that she is competent and could go home if there was care for her 24/7 or ever how many hours a day -
Why not move her back, let her get a HUD approved reverse mortgage and use the money to pay for her (custodial / personal) care.
If she outlast it, then there would be no problem with her being qualified for Medicaid coverage in a Long Term Care facility.

She has to be living in the home to get the reverse mortgage.

I too an questioning the advice you got on the 1% ownership -
I believe that the only way a home could be saved from any Medicaid attachment is if there is someone,
like a spouse or child, disabled son or daughter, etc., living in the home.
That is my understanding as well though I am no expert in the matter.
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lovejoypeace
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Re: What to do with Aunt's house

Post by lovejoypeace »

treciegal wrote:
aprilcpa wrote:I went straight to the NC Adult Medicaid manual and found the following:

4. Non-Countable Ownership Interests
c. Tenancy-in-common ownership in real property, including tenancy-in-common remainder interest.

I purchased (at FMV) my 1% interest in her home, therefore making us tenants in common and as such, it seems my attorney's advice is good.

I also found other attorney's websites in NC that say this is a viable medicaid planning option in NC.
Yes, it sounds as such in NC - similar to life estates.
However, it appears that the transfer of this 1% is still under the 5-year Medicaid look-back rule. So if she has to have Medicaid living assistance, in a nursing home or under some other applicable program, during this 5-year look-back period, there will be a calculation applied to it for her Medicaid eligibility (amount); until the assigned amount is spent. According to the NC Medicaid manual, only transfers at less than FMV can be added back. It would seem that since I purchased my interest at FMV, it would be OK.

As far as you doing something with the home to produce income - according to NC,under this joint tenancy 1%, it is not yours until she dies so any income that it might produce will count towards her eligibility into the Medicaid Long Term Living programs of several different varieties - Long Term Care facility, PACE, etc.

I think you need to get some advice from a NC eldercare attorney.
Or better yet, get her a HUD approved reverse mortgage (you can do this as her POA), move her back home, and get her the care that she needs to stay there as long as possible; maybe for the rest of her life. It is her 99% asset; why save it when she want to go back home for her life.
HUD Home Equity Conversion Mortgages for Seniors (HECM) http://portal.hud.gov/hudportal/HUD?src ... m/hecmhome
Like I have said, we have consulted an eldercare attorney, who suggested this arrangement.
According to the website above, in its current condition, my aunt would qualify for about $40,000. If she were at home, I estimate those costs to be about $9,000 per month. With the reverse mortgage and her current assets and income, she could stay at home for about 10 months. Although I'm not opposed to that, see my post about being responsible for her care. In addition, I can't imagine her heartbreak when her house is "gone". And like I've said, she has longevity on her side and could live to be 95, especially since she has no pressing health issues.
ourbrooks
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Re: What to do with Aunt's house

Post by ourbrooks »

Depression can have other causes than senile dementia. If her depression can be treated, she may be perfectly capable of living in her home with minimum and affordable support. Do check that she's being treated by a psychiatrist or geriatrician who is knowledgeable about psychiatric medications in the elderly. If she is being treated by this kind of specialist, talk to the specialist about the prognosis.
Longdog
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Re: What to do with Aunt's house

Post by Longdog »

I'm sorry you find yourself in this situation.

It really doesn't make sense for the house to be vacant, except for storage. It should either be rented or sold, which might mean it needs to be fixed up to some extent. Even if it's unused, property taxes, insurance, and some limited utilities need to be paid - and for what benefit?
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ddunca1944
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Re: What to do with Aunt's house

Post by ddunca1944 »

aprilcpa wrote:My biggest thing about bringing her home is that I cannot coordinate her care. I have a job and a family (including 2 young kids). If someone doesn't show up to watch her, I can't always drop everything to stay with her or try to find a replacement. When she was at home with her son, they still had people coming for 12 hours a day to help. The nursing home has said they will not release her unless they have proof she has 24 hour care. According to my aunt, she only needs someone to change her diaper. She does not realize she can't cook her own meals, give herself a bath, administer her meds, etc. I know it sounds terrible, but I just can't take that responsibility.
This was the same issue with my late MIL. She could not cook her meals, take the laundry downstairs, walk without a walker, bathe herelf.... But she wanted to stay at homel. For a while we arranged for in home care, 2 aides each day working a 12 hr shilft. She'd find fault with them and call me. It was a 2 hour trip for me, each way, to go over and deal with her "issues". After two weeks of that I was exhausted and it was clear that she could not afford to pay for that level of personal care for more than a year or two... Husband and I (with his brother and wife) had to hold a family meeting and explain the realities to her. Even then she resisted moving into an adult family home. We were insistent and she eventually came to enjoy the social life that she had not had living alone.

You are NOT terrible. You are a human being trying to do the best you can with a relative who is being stubborn and unrealistic. You may have to take a firm line with her. I wish you the very best..
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dm200
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Re: What to do with Aunt's house

Post by dm200 »

ShiftF5 wrote:
aprilcpa wrote:Does anyone know if I could rent out the house while she is on medicaid? Could I use the funds received by renting it to fix it up (siding and windows could wait) or would I need to use the full amount of the rent received to pay for her care?
You might want to check with another attorney about the 1% business on the house regarding Medicaid.

I'm not sure that sounds right.

I am not an attorney nor do I know anything about elder law, but I've researched the Medicaid elder care payment issue a bit.

Please discuss this with an attorney specializing in elder care.

Best wishes
Because so many aspects of Medicaid are very state specific, it is (in my opinion) an absolute requirement to only consult/deal with an experienced elder care attorney qualified and experienced with and in the applicable state (where your aunt lives). I would also suggest making sure this 1% advice is correct - before acting on it in any way.
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