How to Sell the House when Mom or Dad is on Medicaid

Posted on: April 5th, 2018 by , 27 Comments

How to Sell the House when Mom or Dad is on Medicaid

It’s a story I’ve heard all too often… a home remains abandoned year after year… because a family is under the impression that a property can not be sold without jeopardizing long-term care benefits under Medicaid.

While it can be a challenge to liquidate a property in this situation, there are a number of strategies that can help families sell… and legally, morally, and ethically avoid any accumulation of cash that could jeopardize benefits for a loved one.

Meet with a Local Elder Law Attorney

The first question Tampa Elder Law Attorney Elizabeth Allen asks many clients is, “What are you doing with the house?” This is a critical question that should be answered as soon as possible if you own a home in South Tampa where lot values often range into six-figure territory.

It is critical that you work through your particular family’s situation with an attorney in the county where your parents live and own property. If Mom & Dad are in Tampa… make sure you work with an attorney based in Hillsborough County.

While an attorney can work across county lines, I have personal experience that what an attorney can do is not necessarily what they should do as each county court system has different protocols that can delay your case from being resolved.

So, please keep that in mind even if you are helping out Mom or Dad from another part of the state… even if you live just across the bridge in Pinellas County… talk with a local elder law attorney.

Strategies and Tools to Discuss with your Elder Law Attorney

The two most important things you want in place if you are considering selling the family home in 10 months or 10 years are having a plan for the proceeds once the sale is complete and having a well-crafted power of attorney agreement in place to cover any number of issues that can occur as people age.

Different strategies may be available to families depending on the health of each spouse, the status of any Medicaid application, and the competence of the owners of any property that might be sold.

The time to make plans is BEFORE anyone is sick… but many of these strategies and tools may be employed at different stages… so at the risk of being redundant please talk with an elder law attorney about these options and others that may be available.

  1. Transfer of Assets Between Spouses
    This needs to be done in an appropriate way, one of the reasons I reached out to Ms. Allen after meeting her at a South Tampa Chamber event is that her firm has real estate attorneys on staff and a close affiliation with a title company. Their law firm can help ensure you avoid any taxable events or other stresses due to an improperly structured transfer.A do-it-yourself Quit Claim Deed can lead to a number of terrible outcomes for a family that wants to sell a property down the road, so make sure you do this right.
  2. Place Money in a Pool Trust or Qualified Income Trust
    One thing I’ve seen a lot of wealthy families in South Tampa put in place are Trusts where a property can be held in such a manner that has a number of benefits for elderly owners. Pool Trusts and Qualified Income Trusts have different advantages that you should discuss with an Elder Law Attorney.
  3. Purchase Income Producing Property via Third Party Service
    If there is no mortgage on the property, another tool that can be employed when selling an older home that needs a lot of repairs is the immediate purchase of another property in a better condition that can immediately become an income producing for the owners.For example, you could sell an older home in South Tampa for $100,000 to $300,000 and immediately purchase a rental property in another area via a service that will manage the property on behalf of the owner and distribute the income in such a manner that it would not affect any benefits. Your local elder law attorney should be able to give you options regarding companies that can offer this service.
  4. Have a Spend Down Plan
    If you have a mortgage on the current home, and expect that the proceeds will not be significant enough to purchase another property, there may be a window of time where the proceeds from the sale can be spent on things needed by the seller…. such as a vehicle, wheelchair, furniture, or television. Everyone’s situation and needs are different, but this can be an option.
  5. Personal Services Contracts
    Another option that your elder law attorney could discuss with you if it were to apply to your situation is a personal services contract between the seller and a family member providing ongoing care services to the seller of the property. Again, this can be a legally complex arrangement, so make sure you are working with a competent local elder law attorney who is aware of your family’s situation and long-term goals.

The Importance of a Well Structured Power of Attorney

One of the first things you should have in place for an elderly family member who might be facing some long-term health challenges is a well-crafted power of attorney. Again, this is not something you can do yourself with a form you download online. A poorly crafted power of attorney may prevent you from selling a property or acting as agreed on behalf of a loved one.

So, again… make sure you share your long-term goals with an elder law attorney who can help your family have this important document in place. As noted in the link above… the more comprehensive the power of attorney document, the better.

When it’s Time to Sell… Timing is Essential

When you negotiate terms to sell your property it is essential that you close early in the month… preferably during the first 2 or 3 business days that are available if you have an owner current getting Medicaid Benefits. This will give you until the end of the calendar month to execute any plans to transfer funds before cash on hand must be reported to Medicaid.

The earlier you close… the more time you have to execute your plans with your elder law attorney.

When your family is ready to sell, we have flexible closing dates.

Flexible closing dates are one of the tools that we use at to help homeowners hoping to sell to a builder. We can always close on your timetable, and often allow extra time to complete moving out.

If you are helping a family member with the sale of an older smaller home in South Tampa, or are just hoping to start putting plans in place so you can move when the time is right… give me a call.

My number is 813-784-4199… I’m happy to provide referrals to local elder law attorneys that can assist you with your planning or provide an easy way to get a fair offer for your property where you won’t have to pay for commissions, repairs, of closing costs.

I’m Robert Wilson, Director of Dirt with and EXIT Bayshore Realty. When you’re ready, please reach out to me and let me know how I can help your family.

Proud Member of the South Tampa Chamber of Commerce



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