[WSBAPT] Estate Planning/ Medicaid question

[Ms. Roberta Armstrong]

Ms. McCulloch, I wish to expand on your question...

Is there something Mom can do with the home now to prepare to make her
Medicaid qualified. I understand there is a 5-year look back, but couldn't
Mom try and place the home in a legal vehicle that would give the home to
the children (including repayment of their loans). Seems like that's the
only asset she has to leave for her children.

The 5-year look back makes it a gamble, but if she's in good health and
continues to be, she can document the loan as suggested by Mr. Fry AND have
a little something for the children upon her demise.

Very often the only asset my clients have is their home and they are
raising grandchildren as their own children and want desperately to make
sure their grandchildren have a home when they pass. I don't have a lot of
experience with Medicaid planning or irrevocable trust but would like to
understand more to help these families.

If anyone has a good reference they can share, I would greatly appreciate
it!!

Thank you in advance.

On Mon, Mar 12, 2018 at 4:00 PM, Marcus Fry <mfry at lyon-law.com> wrote:

> My 2 cents: Your client needs to acknowledge in writing the debt to avoid
> statute of limitations issue.  I don’t see any issue is doing this in the
> promissory note.  You should also obtain bank records that document the
> loans, i.e., cancelled checks, bank statements showing wire transfers, etc.
> and I would attach them to the acknowledgement of debt/promissory note.
> This will help demonstrate that these were bona fide loans to her and
> expected to be repaid as opposed to gifts.   Of course, the aforementioned
> assumes that the kids did not consider these gifts, e.g., they did not file
> 709 returns stating that these funds were gifts.
>
>
>
> Marcus J. Fry
>
> Lyon, Weigand & Gustafson, P.S.
>
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> *From:* wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.
> wsbarppt.com] *On Behalf Of *Sara M
> *Sent:* Monday, March 12, 2018 3:48 PM
> *To:* wsbapt at lists.wsbarppt.com
> *Subject:* [WSBAPT] Estate Planning/ Medicaid question
>
>
>
> I am doing some estate planning for a single lady in her late seventies.
>  She doesn't have much in assets, except her home, worth at least $500,000
> and owned outright.  EXCEPT, she has this handwritten note that shows 3 of
> the kids gave her money for the house 14 years ago: 80,000, 80,000, and
> 20,000 and she intends to pay them back when the house is sold.  She is the
> only one on the title of the house.
>
>
>
> We can deal with repayment in the will by percentage of what is left (if
> any).  But what if she has to go into long term care and sell the home?  If
> we draw up a proper promissory note now that allows the kids to be paid
> back with interest upon the sale of her home, is that going to be
> considered a problematic transfer for qualifying for Medicaid?
>
>
>
> Any other suggestions, thoughts, recommendations?
>
>
>
>
> Sara McCulloch
>
> Estate Planning, Probate, and Guardianship
>
> Sara McCulloch Law PLLC
>
> PO Box 4519  Rollingbay, WA 98061
>
> (206) 842-5841  desk
>
> (206) 428-6107  fax
>
> www.saramccullochlaw.com
>
> sara at saramccullochlaw.com
>
>
>
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*Ms. Roberta Armstrong*

Washington State Bar Association No. 42343

Founder and Executive Director

Stewards of Indigenous Resources Endowment,

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Roberta at IndianWillsOnWheels.org
www.IndianWillsOnWheels.org

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