In case this question has not been asked before, I'd like to hear from the experienced. My husband and I live in a house owned by me. It still has a mortgage and is a drain on my income. And it has a large yard that my husband wanted but no longer has any interest in gardening due to his Alzheimer's. I hate gardening, period. I am thinking of selling this house and buying a smaller place (condo or townhouse) to live in with the proceeds so that there won't be a mortgage. But I am wondering if this would adversely affect my husband's application for Medicaid later when his savings run out. Does anyone know?
Downsizing as we age seems to always be a good idea. But downsizing that creates more joint assets - & if that TSP of yours is also a joint asset - probably not the best move for Medicaid planning purposes. Remember a CS has a maximum for exempt assets (most states have this at 119k) and will have a ceiling as to their income (this all over the place as each state sets their own $ amount). Will downsizing add onto your existing assets / income so then affects hubs Medicaid eligibility?
Also Downsizing and buying a condo in a state that does not seek MERP / Estate Recovery from a CS might mean buying in your name a nicer more expensive place. While downsizing and buying a much lower value property or even renting might be a better use of $ in a state that places a lien &/or does Estate Recovery. You might be able to do some more creative renting - like your kids buy a 2nd home which you pay FMV rent to & that FMV rent covers their mortgage, something like this could solve all sorts of issues but should be run across your attorneys desk.
In the past you’ve posted regarding meeting with 2 attorneys, what were their suggestions? What does your state do for recovery on a CS’s home?
AND limits are placed on those for each of them.
BUT only the in a facility on Medicaid spouse will need to be impoverished (2k in assets) and within Medicaid limits for his income (most states have this at $2100 mo). The CS (community spouse) is themselves not expected to become impoverished but have to be within Medicaid CS limits for their non-exempt assets (119k most states) & income (this varies wildly). Medicaid is a jointly funded federal & state program, BUT each state administers its Medicaid programs uniquely.
So say Worried has 75k in savings & sells her home for 400k. Medicaid for most states has the CS asset limit at 119k. She’s over limit by $356k and for the month received it’s income for her and then moth afterwards it’s a joint asset. If she doesnt find someplace legit to park that 356k asap, hubs is gong to be become ineligible for Medicaid till they are both down to Medicaid limits for him AND for her. Just what to do to me really depends on the likely CS future situation and not a DIY as it’s really an interlocking situation. It’s something that definitely needs a savvy elder law atty, like one that’s NAELA or CELA.
I think you might find our Common Caregiving Abbreviations and Acronyms Glossary helpful for navigating posts in the Caregiver Forum.
You can find it here: https://www.agingcare.com/articles/common-caregiving-abbreviations-and-acronyms-435589.htm
Take care!