Can Mom quit claim on the house to Dad so Medicaid doesn't make a recovery?

Nope. Medicaid looks at all transfers and imposes a penalty. In fact they look back at least 5 years. See an Elder Law attorney before you create a huge fiscal mess. You can go to cms.gov and read the rules for Colorado.
Medicaid will not toss Dad out in the street unless he does something stupid like try to hide the asset with a quit claim deed.

I was told by an elder care attorney that transfers between spouses are okay. Is that information incorrect.

Babs, court ordered transfers, like in a divorce, cannot be overruled by Medicaid. And rules for Medicaid vary from state to state. Exemptions are granted to a living spouse so they can remain in the home. BUT if they sell the home or quit claim the home, trouble ensues. See your state Medicaid rules.

Response to answer above: Mom has already qualified for Medicaid. Dad lives in the home so he granted that exemption. Now, before dad passes away he wants my mom to quit claim the house to him, so when he passes his children get the proceeds not Medicaid. He does not need to worry about a 5-year look back for Medicaid because he more than likely will not need it. Can this be done with repercussions from Medicaid?

Babs, don't do it because mom cannot quit claim her half... This how it would work: she quit claims half of a $300,000 house to Dad. That's a $150,000 transfer of an asset. Let's say Medicaid is paying her nursing home $5000 month. Medicaid is very good at find out about quit claims and they would send a letter stating that they are imposing a Transfer Penalty and they will NOT pay for her care for the next 30 months. (30X5000=150,000).
Bad, Bad, Bad decision.

Babs - it would be a flawed (at best) or fraudulent (at worst) Quit Claim in addition to the transfer penalty issues Pam mentioned.

Why? well when your mom applied for Medicaid there was something within the application in regards to MERP - Medicaid Estate Recovery Program. When they apply for Medicaid for NH, MERP is required to be part of the program. Mom or you or whomever did her application did NOT have to sign off on MERP either. For my mom in TX NH (she still has her home), MERP is an acknowledgement of fact statement within the initial Medicaid application. Also statement is in my moms annual recertification for Medicaid.In addition for the recertification, my mom is required to fill out a form as to any changes in her assets, information on those assets with documentation (like the annual tax assessor bill) and 4 months of banking - so I would have to put in if a QCD was done (and mom gets transfer penalty for Medicaid) - if I did not disclose I personally can be penalized for fraud by the state. In the MERP statement, it reads that any assets of the recipient is subject to recovery unless released by the state. (Release will be a document that needs to be filed to clear the title) All states have MERP as part of Medicaid.

Quit claim deeds by their nature do not provide a guarantee of ownership (that is what a warranty deed does & because of this most mortgage companies will not loan on a house or land sold via a QCD and if you need to put the house as collateral later on a QCD property may not qualify). What a QCD does is transfer what a person believes to be within their ownership to another. For married couples, doing a QCD isn't usually done as the spouse almost always has the right of survivorship or the house is viewed as community property so the spouse outright inherits the house. By applying & accepting Medicaid,she acknowledged that the house/asset is subject to a MERP claim or lien by the state on her asset. She does not have the ability to do the QCD as she knows by being on & accepting Medicaid that Medicaid can have their own claim or lien on the asset. Colorado has outsourced MERP to HMS and they are very, very, very good at what they do to enforce recovery & really doing a property search is just a few keystrokes from being found out and having a penalty. All real property value & records - homes, land, cars - are all recorded by the local assessor and then dovetailed into the state database. It will show up eventually. This site has postings from others whose parents did a QCD of the home in an attempt to hide it from Medicaid and then applied for Medicaid within 5 years. Eventually the state will find out and the state required was either they pay a transfer penalty OR they QCD'd the property back to the parents AND until this was done the parent was suspended from Medicaid and the kids had to private pay @ the NH till it worked through the system. So think carefully if you could private pay for mom if this happened.

Your dad, assuming he outlives mom, will qualify for the "community spouse" exemption or exclusion of the home for MERP. When mom dies, the state will send out a letter regarding MERP to whomever Medicaid has on file for contact. Dad fills out the form, provides whatever documentation is needed and he will get a release of MERP claim or lien and he owns the house outright. It will be his 100% (this is how it works for TX and I assume most states do the same). What he does then, like gift it to his kids or sell it is up to him. If Dad could himself need Medicaid, you want to speak with an elder law attorney regarding how best to structure the transfer of the house so it works best for a future Medicaid application.

My grandfather recently passed away. Grandma has been in a nursing home for about three years. The family home, which grandpa built has a value of $170,000. Grandma receives about $1500 a month in SS. Although she has been in long term care for three years, can the PoA transfer the title to a grandchild, assuming the family is willing to supplement grandma's monthly income to pay out of pocket for long term care. I understand she will get penalized, and Medicaid will no longer pay. Based on the math, it would be cheaper to pay an extra $1000 out of pocket each month, as opposed to buying the house back at $170,000 over next couple decades. Is my idea sound, or would it have negative legal ramifications?

Donny, transferring would trigger both the Medicaid penalty and a huge income tax implication for the grandchild. Don't do it. Plus check the costs, I have to believe that a nursing home is a lot more than $2500 per month. Average NH cost in Pueblo CO is over $200 per day. Plus you would have to pay back the three years Medicaid has already paid for her. A POA can be sued for hiding assets . So I would foresee a $60K tax bill for the grandchild and a judgment against the POA for $162K for three years of NH care. NO GO.

donny - I would suggest you get an attorney &do a couple of things BEFORE your meeting with legal (my comments are based on gran being on Medicaid)-

- @ the NH: speak carefully with the NH to find out exactly what the Medicaid & private pay daily room & board cost is of the NH; what the total has been so far for what Medicaid has paid the NH; and how this facility approaches transfer penalty. Also check to see that gran is 100% current on her required "SOC" (her co-pay or share of cost) to the NH. As Pam has said, NH are a lot more than $ 2,500 mo. My mom is in a NH in TX which has a very low Medicaid reimbursement rate @ about $ 145.00 a day / $ 4,400 a mo for just room & board. Once you add in the costs of medications, any therapy, etc. the average NH is closer to 6K a mo (my mom is also on hospice and that alone is another $4,500 a mo paid on her care but thorough Medicare) and TX is a low reimbursement rate state! Once gran is off Medicaid, the NH does NOT necessarily have to bill you at the Medicaid rate, they can bill you at a private pay rate, which could mean double the daily rate too. All these are reasons why you need to carefully speak with the NH.

- IRS issues & minors: in addition to the tax bill Pam mentioned, I'd be especially careful on doing this as often putting real property in a minors name can be viewed as done to avoid taxes as they have minimal tax liability. You really should speak with an estate attorney who does elder law & a CPA too about how best to do this for your state. There may be a UTMA type of situation that can be done. Still the Medicaid transfer penalty to deal with but could be a better approach for IRS gifting taxes. Also realize once that minor reaches majority if they want to sell the house, they can without ever consulting you or other family. It's theirs.

- Medicaid application details. Please look over the application for Medicaid that someone signed off on for gran. Within it will be a statement regarding MERP- the Medicaid Estate Recovery Program. By accepting Medicaid, you accept the terms of the program including MERP. You do NOT have to sign off on this either, it is an acknowledgement of participation. If you as DPOA or whomever in the family does anything to change ownership of an asset (home,car, land) that gran had at the time of the application, you have to report it to Medicaid. I don't know how other states do this, but for TX Medicaid there is a sentence to the effect that if you don't
let Medicaid know of any changes, you can personally have a penalty or fraud action against your personally. TX does an annual re-certification for Medicaid in which I have to send 4 months of banking along with details and documentation on assets, insurance, etc for my mom to be renewed for Medicaid (this years batch was 28 pages faxed to TXDADS). If CO does this too, then you have to disclose any changes.

- Title issues. If you don't deal with Medicaid, and when the transfer surfaces (and it will eventually), the property can have issues with having a clear, clean title. The claim or lien from Medicaid will be on the property till the Medicaid bill is settled. There are several posts on this site from those who did a property transfer or ignored the MERP notice on the property after the parent on Medicaid died and now a couple of years later, they are trying to deal with selling the property and find when they go to closing that low&behold there is a claim or lien on the property which has to be paid from the proceeds of the sale in order for the sale to go through. Or they want to transfer it to their name because they are using the property as collateral, and can't as they don't own it. Having clean, clear ownership of property is really important. You don't want to gift the house to a minor grandkid and then find that they have in their name something with all sorts of debt which is tied to their name.

- if you are in Colorado, MERP is has been outsourced to HMS by the state. They are very, very, very good at what they do to enforce MERP.

Again find out the details and then speak with good legal on all this. Good Luck

I live in Kansas. I am my Mothers POA. Two years ago my Mother had a bad fall and ultimately ended up in a care home. At that time... it had been seven years since my Mother had quitclaim deeded her home to me. She has been on Medicaid since she got to the care home. Her home is paid for.... and has been, however Medicaid says I have to sell it to pay for her debt to Medicaid. At this time, it has been 9 years since she quitclaim deeded her Home to me... I have been living there to care for it. Can they make me sell it to pay her debt to Medicaid? I have been told several different answers to this question. I have been told that since it is paid in full, and past the 5 year look back law, that they cannot make me sell it, that it truly is my home. Please help my Mother and me... this is worrying her and I need for her to have peace. It concerns me as well, I wish to have happy and worriless (one less worry) times with her.

When she did the QCD to you, did you get it notarized and signed off by witnesses and then you went and filed the QCD at the courthouse. So that in fact for the past 8 or 9 years the name on any & all documents on the property recorded at the courthouse and in all tax assessor records & bills and chancery court, etc, all show your name. Your name and your name only & for years & years.

If so and you can show that you have been paying all on the property all these years & you have a homestead exemption in your name on the property then I'd bet it would clearly establish this was a legal & valid transferring of property and ownership.

If not, then there could be issues…..I'd bet in my non-legal opinion is that if you didn't do all this and mom continued to pay on all on the house, it will be viewed as a straw purchase done for asset avoidance. If so, really you need to get an elder law attorney to deal with the appeal of mom;s medicaid ineligibility as it will get complex.

Also the whole 5 year look back is not fixed. Most states use a 5 yr lookback as it can get too cumbersome to do longer. But I think the federal Medicaid rules allow for a 10 yr period if fraud is suspected. Kinda like how the IRS can go after fraud for years & years back.

As a side note to this, after Hurricane Katrina I did some outreach as my regular work situation in New Orleans was in a flux and over & over again QCD issues would come up. Often family would transfer ownership via a QCD as they wanted to do things as cheap as possible or thought they didn't need to get an atty and throught a QCD done off the internet was just fine for their needs. Bad idea as what happened over & over again was the the QCD - as it only implies the sale of what the seller things they own - was in fact not valid. The property had debt against it or still had partial ownership from prior generations, so that in fact grannie did not have clear & full ownership on it. Only a warranty deed guarantees ownership. So when folks were trying to get FEMA or SBA funding to rebuild, they couldn't as they couldn't prove true & complete ownership by the QCD. they would need to get all those pesky old heirs to sign off on their share and always, always there was someone in the family who either wanted their $ and then some or had all sorts of jugdements against them and so clouded ownership. It is one of the reasons why even today - a decade after Katrina - there are so many properties just sitting there blighted and abandoned in coastal MS and LA. QCD's can work but you have to do them carefully with follow through when selling property within family. QCD's via a court order work great, I got a property in a divorce to me via a QCD and the judges ruling trumps any QCD issues.

So whats the status on the QCD?

Wouldn't it be great if everyone could keep their assets and the government would pick up the tab for long term care? Never mind - it's a rhetorical question.

worriedinKS, You never filed that quitclaim with the county did you? So the county records would still show she owns it. You will need a lawyer to clear that up now.

OK, dad quit claimed his house to my sister and I over 10 years ago, and we just put him in a NH this July and applied for Medicaid. Since it is over the 5 year look-back, does that mean Medicaid cannot "count" the house as an asset?

As a taxpayer, I would like to say that your mom is on Medicaid - at taxpayer expense. Assets need to be used for her care. I'm not a fan of paying higher taxes so your mom can get Medicaid and then you guys get a windfall. Sorry - think about what you are trying to do. It is cheating & unfair.

Everybody likes to complain about how awful nursing homes are. Maybe they wouldn't be as bad if people quit trying to screw the system by hiding assets and refusing to pay what they can for their own care. My brothers and I would be inheriting a small fortune had my mother not paid out of pocket for her Assisted Living, her nursing home and her caregivers. My mother wasn't born with a silver spoon in her mouth - in fact she came from nothing but was able to save a tidy sum for her retirement and care. I have no problem at all with Medicaid paying for individuals who were not able to do the same - life can deal out some crappy hands and many are unable to do it - and that's what Medicaid is for and everybody deserves to receive care in their old age. But this purposeful hiding of assets so adult children can get a bigger inheritance at the expense of everyone who honestly pays into the system really chaps my hide.

RainMom, thanks for having the courage to be frank about people trying to shield assets yet feed at the public trough. I agree completely. I find it reprehensible.

There are people legitimately in need who have no assets to shield; these are the people who need Medicaid assistance, not those trying to sequester their assets yet still suck off public funds.

Judee, if you post a new question instead of adding to an older one, sometimes you get more prompt answers. Re-read the post from Igloo from Feb 2016 - if you and your sister filed on the Quit Claim Deed with the courthouse and have been personally paying all expenses for the property and have copies of receipts tracking the expenses, you can make the argument with Medicaid. If you left the property in Dad's name to get property tax benefits and didn't change utility bills, etc. over the past 5 years, it will be looked at during the Medicaid review process. Get an elder lawyer familiar with Medicaid to look at the paper trail to advise you. In this age of computers, property ownership is in the computer systems and easily looked up by the state in tax records, etc. Get some legal advice from someone in your state. If you didn't register the deed to take advantage of property tax benefits or homestead, that's a problem.

Rainmom, same with my parents, both weren't born with silver spoons. If my Dad wanted to go to college, he had to work his way through... and he did... when he graduated he had no college debt.

When I took over taking care of my parents finances, I was amazed how much money they had saved for "rainy days".... my gosh, all that on my Dad's income which by today's standards was pretty low... they lived way below their means.... they never kept up with the Jones.... they paid off their house pretty quickly and never touched the equity. That equity is now paying for Dad's memory care for years to come.

As a taxpayer I am more than happy to help those who fall onto hard times. But it irks me those who shopped like there is no tomorrow thus had very little in savings... had a brother-in-law who filed bankruptcy twice because he and wife couldn't stop shopping or going on trips.

Same boat here, My FIL'S monies and investments are his, to pay for his future expenditures, healthcare, Nursing Care, Senoir housing. We could have easily siphoned off over a quarter million dollars, when he first moved in with us 13 years ago, cashing in his investments, gjfting 12 grand a year to each of us and our 4 kids, but we didn't! My own parents raised 6 kids on one income, paid off and then sold their home for a tidy profit, 40 years later, to help fund their retirement, lived comfortable yet modestly, fortunately did not have to go into Long Term Care, because all 6 of us cared for them until they died, but not every family is like mine and able to do that. In the end, there was exactly 7 thousand dollars left to each of us, in an inheritance, as it was so important to them that they leave us each Something. Considering the soaring costs of Nursing home care, that was cutting it close, but heck, we didn't want their money, we wanted them healthy and whole, but it is what it is. Not every situation works out that way. But you shouldn't be allowed to just hide away all of your parents money, and expect the government to foot the bill!

My mom was living in CT prior to being placed into a NH Long term facility in MA she is not able to sign any documents because she has dementia. I recently attended a meeting at the NH and during a conversation it was stated that my father had his home quit claimed from my mother to him entirely I questioned if this was legal and was told it was. I was also the Exeutor of the estate and POA but was told that my father had me removed and had his son put into this position. Is any of this legal?

Cherie, it depends on when your Mom had quit claimed her half of the house over to your Dad. If it was done within the 5 year look back for Medicaid, Medicaid would put a red flag that file. If Medicaid feels that this quit claim deed was done to hide Mom's assets, then Medicaid could place a lien on half of the equity in the house. Your Dad can remain in the house, but once he passes, the house needs to be sold and Medicaid paid back. I suggest you contact your State's Medicaid office to verify this as rules and programs are always changing.

Are you saying that you were Executor of your Mom's estate and were her Power of Attorney? If yes, then only your Mom can authorize a change, and since she has dementia and is living in a nursing home, no one can change her legal documents.

Now if you were Executor of your Dad's estate and was his POA, then yes, if Dad is of clear mind he can make as many changes as he want to his legal papers.

Thank you for your response. I just wanted to clarify things a bit to assist you in your question. Back in 2003 I was appointed the POA and Executor of both parents with the conditions that if either parent failed the other parent would be in charge or if both parents became incapacitated I would be responsible. It is my understanding from conversation held during the meeting at the NH that a quit claims deed was made within the last 60-90 days to have my mother quit claim their home/estate to my father. When I questioned this my father informed me that their home and estate was now solely in his name and my mother would only be allowed to keep $2,000,00. I was also told that their joint checking account still exists with only $500.00 in that account and another checking account was opened with my fathers name on it. I believe this was done because I brought it to his attention at a meeting held at his attorney's office that I was legally able to take money from their joint checking to purchase things for my mother and this did not go well at that point he told his attorney that he wanted to change everything and take me off completely and his attorney informed him that he could not change this where it concerned my mother. (I bought many things for my Mom because she had nothing at the NH I did not request compensation nor would I, I just wanted my father to be aware of this contingency). I am confused as to how my mother's property be legally quit claimed to my father since she is still living and unfortunatly is mentally unable to make this decision let alone sign her name. Sadly my Mom doesn't know anyone anymore. I was also informed
that my fathers son from a previous marriage was now my fathers POA. It appears that my father is allowing his son to assist him in the decision making for my mother. Another thing I got from this meeting at the NH is that they are waiting to get my mother's life insurance policy to be signed over to the nursing home and it was requested that they cancelled her current health insurance policy through United Health Care. I am not sure if this is true or not but I was informed by others (with the thought that my father didn't want to lose his home or other property) that my Mom would have to be admitted into the hospital for three
days and during this time there would be an assessment on her health with the advisement she be admitted to a long term healthy care facility. Once she was admitted to a nursing home in MA (she has been a life long resident in CT) that after 90 days being in the NH another assessment would be made and at this point she would be considered a MA resident and would then be ward of the state of MA and at this point everything would be covered under Medicare. This all just sounds so wrong. Why should the state of MA be responsible for her Medicare and her husband keeps all their assets.

Cherie, Medicaid will not allow what he has done. They will simply impose a penalty, meaning he will have to give it back to pay for her care. Should he refuse, the nursing home will sue him and win, plus legal costs.