Probate - Posted by Don

Posted by Randy (SD) on October 20, 2003 at 15:52:40:

Yes write it up… Check with the probate attorney but as long as there are other obligations the estate has to pay, real estate can be sold below the FMV.

Probate - Posted by Don

Posted by Don on October 20, 2003 at 15:07:11:

My wife’s parents are trying to sell her grandmothers house in Central Illinois. The house is worth between $80,000 to $85,000. Her grandmother has been in a nursing home for sometime and didn’t sign over anything to her mother. They took $40,000 out of house to pay the nursing home and now are needing to sell or the state takes it over. I would like to help out and buy it but I only have $4,000 cash. The house is a 3 bedroom ranch with 1 bath and one stall attached garage with no basement. Does anyone have any ideas before it goes to the state to sell it? Can they sell it for less than the market value and still be legal with the nursing home and the state? Looking forward to hearing from you. Thanks.

Re: Probate - Posted by Kristine-CA

Posted by Kristine-CA on October 20, 2003 at 18:09:09:

Don: this is not something you want to go forward with until you consult with an attorney. Preferably one who does elder law or has worked with Medicaid and your state health program before. I can’t stress this enough. Do not assume that there is no debt besides the equity loan. It is possible that the grandmother is getting care and signed something that agreed that her estate would pay the costs after her death. Do not assume that the state can take the house. No disrespect intended, but it is very likely that your in-laws are not working with all the facts regarding spending down the grandmother’s assets.

Please have your in-laws contact an elder law attorney. They are lawyers who specialize in figuring out just these kinds of situations. The good ones are truly advocates for their clients in an incredible maze of bureaucracy and seemingly contradictory policies.

Sincerely, Kristine

be careful here - Posted by gerald(tx)

Posted by gerald(tx) on October 20, 2003 at 17:20:09:

The reason the property is going to the state is so that the grandmother will be indigent, with total assets of less than $3k. Then the state Medicaid will foot the bills.

There is a 3 year “Lookback Period” in the law to prevent relatives from disposing of the property at the last minute and leaving nothing for the state. If you knowingly participate in the wash sale, then the state will consider you a party to fraud.

Re: Probate - Posted by Randy (SD)

Posted by Randy (SD) on October 20, 2003 at 15:33:08:

You say theay $40k out of the house to pay the nursing home? Does that mean the nursing home has a lien on the property, there was a loan taken out to pay the nursing home or what? How did they take $40k out of the house? If there is no Medicaid or welfare benefits that need to be repaid the (wife?s) parents can sell the property for any price they choose assuming there are no other heirs.

Re: be careful here - Posted by Wayne-NC

Posted by Wayne-NC on October 20, 2003 at 19:47:50:

However, a % of the property can be transfered to the heirs as long as there is enough money left in the estate to cover 1. Current expenses 2. A Medicaid waiting period equal to the amount that was transfered at a rate of about $5,500 per month.

Re: Probate - Posted by Don

Posted by Don on October 20, 2003 at 15:44:22:

The $40k taken out was a equidity loan to pay the nursing home. There is nothing else owed on the house except for this loan. In theory could they sell the house to me for 40k and I could resell later and split the profits?

Re: Probate - Posted by Wayne-NC

Posted by Wayne-NC on October 20, 2003 at 19:42:26:

If you plan on eventually applying for Medicaid, the home will have to be sold at market value. How are you going to sell it without a POA? I am going through this exact same thing but we have the POA for all transactions including RE.