My Mom did this almost 5 years ago. She deeded to 3 kids and "retained a life estate" meaning as long as she is alive she still can live in the house. She fell 2 months ago severely breaking left arm and fracturing several ribs. Still can't use left arm but wants to go home. She is unable to live by herself now, won't live with any of 3 kids but now she can't remember the home she lived in for over 60 years but still "wants to go home". She is mentally and physically unable to go home. Question now is - even tho she retains a life estate - if she is unable to live by herself - can we now sell her home instead of letting it sit empty and deteriate or be vandalized? The home and land is only worth about $70,000 to $80,000.
Is your situation that she went to a LTC/NH from the hospital for rehab and is there being private pay and you need to figure out how to pay for it longterm OR is she is in a NH and there Medicaid pending; OR is living with family but needs to move to a facility and you need to find a way to pay for it. I think a lot of what you do depends on what the need is, the time constraints and her overall financial.
For NH Medicaid eligibility, an individual must show that:
1) are 65+,
2) medical condition requires that level of nursing care,
3) monthly income less than their states max (about 2K; for TX is $ 2,094.00),
This is the “income test” – how much $ do you make.
4) countable assets are no more than 2K
This is the “asset test” – how much $ do you own.
5) not gifted away anything of value during the 5 yr look-back period.
If you do, there could be a “transfer penalty” when items are gifted below value. Penalty different for each state as it’s based on each state’s NH reimbursement rate. Texas reimbursement rates are super low, like 47 or 48 lowest in the US.
TX 2012 daily NH rate is $ 142.92 which means a 30 day month is $ 4,287.60.So if her share from the sale of the property is 20K then she will have to pay for 140 days of NH room & board or use it to pay for other allowable assets, like a prepaid ncv funeral plan (under 10K) or small amount of term life insurance (under 1,500 and ncv), before Medicaid will pay.
In Oct, TX tax assessor/collectors office sent out 2012 tax bills. Try to find it as it will show the current valuation on the property and all exemptions. You really need this figure to work back from to figure out the life estate taxes.
You can go and ask for it to be reduced if there is documented reason's why it should be. A lot of the TX assessments were done in 2000-2003 and are higher than what they realistically could sell for in this current market. The rates & timetable for paying are set by the state, so complaining to the assessor is moot. However you can challenge the amount. Some assessor's are strict in your only being able to challenge an assessment within the 30 day window from when the forms went out but others more flexible. You can also get the info on line. I got my mom's homesteaded property reduced about 15% but had to go with her 2 times to get it done. Whatever you do pay property taxes, penalties are nasty.Good luck.
If you sell her home, her share of the proceeds will make her ineligible for Medicaid until she spends down the money or converts it to a non-countable asset. I suggest a number of these in my book "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets" , or consider consulting with an elder law attorney in your area.