Q: It has been suggested that my mother, age 87 with dementia, who lives in California and owns her home outright,
should sign over her home to me, the executor of her living trust and also having a POA for financial matters. Thereby, reducing her assets in preparation for her eventual move to assisted living. Doesn't sound legal to me!
A: There are many issues involved in what you suggest that could have serious consequences if not done correctly. For example, if the home has increased substantially in value since the time your mother purchased it, there could be a large capital gains tax assessed. As well, if she needs to qualify for Medi-Cal benefits, some transfers could result in large penalties if not done correctly. You should talk to an elder law attorney. In looking for one, try to find an attorney that does this as their primary area of practice and look for one that specifically states they do Medi-Cal planning as this area of law is very complicated and not that many attorneys handle this type of case. If you can't find someone on this site, go to the National Academy of Elder Law Attorneys, www.naela.org, as those attorneys will have the necessary type of experience.
Gerald Barry Dorfman and Inna Fershteyn agree with this answer
A:
I totally agree with previous answer. I would advise to set up Irrevocable trust with a life estate for your mother. I don't know what California look-back for nursing home transfers is but the faster she sets up the trust the less issues she would have in the future. Her capacity is also at issue.
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6 users found this answer helpful
A: Bad idea. Although you are the POA if your mother still has sufficient capacity to make her own decisions you should not be making them for her. If she does not, her home is an exempt asset for determining medi-cal eligibility as long as her equity is equal to or less than 750k. If she transfers it to you does that change what assets pass via her will or trust? If so the beneficiaries under her estate plan would have a claim against you for intentional intereference with their inheritance and more. Do you have brothers or sisters who would stand to inherit her home. If you transfer the home to you as her power of attorney holder there is an issue with self dealing/breach of your duties as a fiduciary. Also if you take the home via a deed transfer this is considered a gift which means you take your mothers basis for capital gains tax purposes, whereas your basis would the value on the date of death if you inherited. An irrevocable trust suggested in a prior answer would be totally inappropriate. Also just so you know in financial elder abuse cases POA holders get in big trouble for taking the exact action you propose
A: Let me add that if your mothers assets are not in a revocable living trust they will be subject to medi-cal recovery upon her death if she gets medi -cal for nursing home care because the home will be part of her probate estate. There is not enough information about your situation to determine whether the appropriate documents are in place and if not how to best get the asset out on her probate estate if there is no revocable living trust in place.
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