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  1. #1
    Join Date
    Jan 2018
    Location
    TN
    Posts
    3

    Default How to Protect Home Equity if You Sell Your Home While Receiving Medicaid

    My question involves real estate located in the State of: Tennessee .

    I purchased a home in 2006. I am on SSD, Medicare and Medicaid. In 2008, my father, who was a lawyer, passed away and left me a Supplemental Needs Trust Fund. My mother is trustee. I never planned to stay in TN longer than 2 years. It was a pit stop on my way back to MI from Florida. I went through a breakup and wanted to clear my head.The house was a fixer upper and just needed cosmetic work, or so I thought. After putting over 40K into the house for renovations and remodeling, borrowing the money from my trust, I was ready to list. Than I got very sick. To the point I can't get out of bed.

    I just turned 55 and now Medicaid can stake claim to my house if I sell it or die. There are other beneficiaries on my trust if I pass away, and I signed a personal loan agreement with my mom and a friend who loaned me money. Both to be paid off upon sale of my house. I would not make a penny.

    Now that I am 55, and too sick to clean the house and prep it to sell, I don't know what to do. I desperately want to sell this house and move back to Michigan. Rent for 6 months and buy my "forever home".

    Is there any way to make sure that when I sell my house, the profit will go back into the trust, and to my friend, without Medicaid taking it for payback? I have not been hospitalized or in a nursing home and just turned 55 in December. But with this heart problem that has benched me, it could happen, and soon. Thank you

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    97,142

    Default Re: How to Protect Home Equity if You Sell Your Home While Receiving Medicaid

    Is your concern that you have received Medicaid benefits that have resulted in a lien against the equity in your home? If so, have you verified that with the state Medicaid agency? Or is your concern that you might not qualify for Medicaid after the sale of your home based upon your retention of, or how you distribute, the equity you obtain from your home when you sell it?

    You state that you borrowed money from the trust, then later indicate that you borrowed money from your mother and from a friend. Also, when you say, "I signed a personal loan agreement with my mom and a friend", it sounds like your mother and friend joined together to loan you money, which would seem unusual. Is there in fact only one loan contract for a loan received from both your mother and the friend, or are there two loan agreements? Is there also a formal agreement with the trust, if in fact you borrowed money from the trust?

  3. #3
    Join Date
    Jan 2018
    Location
    TN
    Posts
    3

    Default Re: How to Protect Home Equity if You Sell Your Home While Receiving Medicaid

    I am concerned that I wont be able to put one loan back into the trust. My mother is trustee and we have every reciept. The other loan was from my friend to pay off a credit card and home equity loan.

    Otherwise my debt to income would prevent me from renting something when the house is sold. My mother, as trustee, agreed to have the work done with the money from the trust as long as when the house sold, the money was put back. My moms lawyer for the trust has one promissary note.

    I don't know the laws on this subject. Does Medicaid put a lein against the house when someone turns 55?

    Thankyou.

  4. #4
    Join Date
    Jun 2014
    Posts
    2,716

    Default Re: How to Protect Home Equity if You Sell Your Home While Receiving Medicaid

    Do you live in this house ? If not, it is an Asset for Medicaid purposes. You may not qualify for Medicaid again until you sell the house and spend the money.

    I think you are getting Estate Recovery and Medicaid Eligibility confused. Estate Recovery can take the property to sell it if you are receiving Medicaid, 55 or older and living in a nursing home when you die.

    Based in what you have stated, Medicaid is helping with some of your Medicare expenses through Medicare Savings Program and/or Extra Help. If this is correct. You do not have to worry about Estate Recovery, But, you will not qualify for Medicaid to help with your Medicare expenses until you have spent the money from the sale of the house. Any overpayments may have to be repaid to Medicaid. To be clear, if you only own one home and live in it. That home is exempt from being a resource for Medicaid. Medicaid does have resource limits. The income and resource criteria for Medicare Savings Program are at the link below.

    If you receive SSDI or Retirement. You should not have a problem finding a place to rent due to your income.Explain to the owner you receive monthly benefits and show your Benefits Verification Letter. You can print this from your my social security online account. Or you can call SSA and ask them to send you the letter.

    Medicare Savings Programs-
    https://www.medicare.gov/your-medica...-programs.html


    State of Tennessee Estate Recovery-
    https://www.tn.gov/tenncare/legal/estate-recovery.html

  5. #5
    Join Date
    Jan 2018
    Location
    TN
    Posts
    3

    Default Re: How to Protect Home Equity if You Sell Your Home While Receiving Medicaid

    Thankyou. I live in the house, but need to sell it. I just was scared I would do something wrong. Thankyou so much.

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