Elder Law
I have a friend, his parents deeded their house to him back in 1992/3. At the same time, the deeded themselves a life estate. The recently sold the property, the son received all of the proceeds and now they are trying to figure out if the release of the life estate voids the 5 year look back period by Medicare or if they are still protected against the look back.
Re: Elder Law
Yes, there's a problem -- but it's not about Medicare. The five-year lookback rule concerns potential disqualification for MassHealth.
Son should NOT have received all of the proceeds -- that's where the problem was created. Son should have received an amount equivalent to his remainder interest (and likely should pay taxes on the share) and parents should have kept an amount of proceeds equivalent to the value of the life estate. MassHealth has specific rules which must be reviewed to keep everything clean. The only way of fixing the problem is to correctly recalculate how the proceeds should have been divided and then have Son give back to his parents the correct amount. All of these transactions should be documented to protect the parents should either of them need help from the state to pay for care in the next five years.
I've practiced elder law for a decade and would be pleased to advise the parents about the law and their options.
Re: Elder Law
Yes, there's a problem -- but it's not about Medicare. The five-year lookback rule concerns potential disqualification for MassHealth.
Son should NOT have received all of the proceeds -- that's where the problem was created. Son should have received an amount equivalent to his remainder interest (and likely should pay taxes on the share) and parents should have kept an amount of proceeds equivalent to the value of the life estate. MassHealth has specific rules which must be reviewed to keep everything clean. The only way of fixing the problem is to correctly recalculate how the proceeds should have been divided and then have Son give back to his parents the correct amount. All of these transactions should be documented to protect the parents should either of them need help from the state to pay for care in the next five years.
I've practiced elder law for a decade and would be pleased to advise the parents about the law and their options.
