Protect real estate from Medicaid

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DEAR BENNY: Seven years ago, when my mother was 80, my husband and I purchased cooperative apartment shares in a senior complex for her to live in. Since at least one of the tenants had to be over 55, we put her name on the shares, as well as my name. The actual paperwork reads: " ‘My Mother’s Name’ or ‘My Name’ as joint tenants with right of survivorship and not as tenants in common."

If my mother needs to move to assisted living or a nursing home, will Medicaid try to get possession of this apartment? I’ve called the co-op’s attorney, senior law offices here in Reno, Nev., and I’ve called private attorneys. No one can give me an answer.

One office suggested I call the Medicaid office. As much as I would like to, I think that might give Medicaid an opportunity to take what isn’t hers. We used equity in our home to purchase this apartment. My mom lives on Social Security and could never afford this apartment.

One lawyer suggested the co-op "reconvey" the share back to my name, but their bylaws require that whoever is on the deed live there.

Any ideas? Are we safe in keeping this, selling it and keeping the monies, or will Medicaid take it? –Penny

DEAR PENNY: This is a complicated question and I am surprised that the senior law offices were unable to assist. There are a number of "elder lawyers" throughout the country, and you can locate them on the Web. I searched "elder lawyers" and found a number of Web sites that should be of assistance to you.

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Generally, however, Medicaid (which is administered by the state, with each state having its own rules) does not "get possession" of property. But if your mother applies for Medicaid, I assume she will need to disclose her interest in the co-op as an asset.

It is possible that the state will take into account the fact that she is not an "equitable" owner of the property (as she did not contribute to the purchase price of the property) and simply disregard the asset. But even if she is considered to be an owner for Medicaid purposes, the state may impose only a lien on the property rather than require it be sold.

In fact, if the state considers the co-op interest an asset of your mother, it wouldn’t require her to sell it, but could deny her benefits until her assets, including her interest in the house, were spent down to whatever the threshold is in Nevada.

Many states allow a number of exceptions. For example, if a disabled family member (or a spouse, which I assume there is none) is living in the property, the Medicaid applicant would qualify for benefits and a lien would be imposed on the applicant’s share of the property in the amount of any benefits paid — but the benefits would need to be reimbursed when the property is sold or the disabled person or spouse dies.

This is a highly specialized area of law, and not all attorneys understand the rules or the law.

DEAR BENNY: We are buying a home and our home inspection revealed the presence of moisture and a somewhat significant amount of toxic mold. The remediation work will cost about 5-7 percent of the purchase price. Would you advise that we: 1) insist the seller pay for all the work to be done prior to close of escrow, 2) ask for a price reduction to cover the costs and do the work ourselves as part of a larger remodel plan, or 3) ask for an escrow holdback until the work is finished and costs are determined?

We are concerned that the seller may skimp on the remediation and moisture work and the problem will recur. If we take on the responsibility, we have reason to believe that the costs may escalate due to hidden problems — and a negotiated price reduction may not cover it. Do you see any issues for future resale if we can certify the mold was removed? How can we best protect our interests, or is this a property we should walk away from? –Malia

DEAR MALIA: In law school, students are told that real estate is unique. From my many years practicing law, I have learned that this is not always true.

Unless this is the house that you absolutely have to have, I would walk away. Not all mold is toxic, but unfortunately the media has blown this way out of proportion. Nevertheless, it is (or can be) a significant health hazard. …CONTINUED