Q: My aunt gave her home to her threekids 10 years ago and reserved a life estate for herself. She went to a nursing home
January of 2020. Before she went to the nursing home. she put a new roof on the house. She applied for Medicaid in January. She was denied because DHHS said that the value of the new roof is a divestment of three-fourths of the $13000 roof cost. They are more or less saying that the life estate is only 25% ownership for home improvements such as the roof? What?
They may be right or if the life estate requirements were that she maintain the house they may be wrong.
Hard to say without actually examining the documents but why was this mechanism used rather than a ladybird deed which would have made this moot?
It may be too late at this point but I’d urge you to consult with a local attorney ASAP to see if there are arguments one way or another.
This DOES point to why professional planning is necessary to avoid unexpected results as much as possible though.
— this answer is offered for information only and does not constitute legal advice nor create an attorney-client relationship. If you have further questions I urge you to consult with a local attorney.
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