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<p class="MsoNormal"><span style="font-size:12.0pt">Why doesn’t C pay off the mortgage in exchange for an increased equity interest in the house. Using simple math, if the property is worth 500k and the reverse mortgage is $250k, the equity is ½ of the value.
If C pays off the mortgage, he should have an equity interest of ½ from repayment of the mortgage and ¼ from his original equity. Now he owns 75% and B 25%, limiting estate recover to that portion that B owns. This might be accomplished with a TIC agreement
clarifying that unequal contributions increase the ownership of the paying party while decreasing the ownership of the nonpaying party.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Heather<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:16.0pt;font-family:"Vladimir Script";color:#1F497D">Heather S. de Vrieze</span><b><span style="font-size:16.0pt;color:#1F497D"><br>
</span></b><i><span style="font-family:"Garamond",serif;color:#1F497D">Attorney-at-Law<o:p></o:p></span></i></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E">3909 California Avenue SW<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E">Seattle, WA 98116-3705
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<p class="MsoNormal"><span style="font-size:8.0pt;color:#A6A6A6"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:8.0pt;color:#A6A6A6">CONFIDENTIAL & PRIVILEGED. This e-mail message may contain legally privileged and/or confidential information. If you have received this e-mail in error, please notify the sender immediately
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<p class="MsoNormal"><b>From:</b> wsbapt-bounces@lists.wsbarppt.com <wsbapt-bounces@lists.wsbarppt.com>
<b>On Behalf Of </b>David Faber<br>
<b>Sent:</b> Wednesday, May 19, 2021 2:29 PM<br>
<b>To:</b> WSBA Probate & Trust Listserv <wsbapt@lists.wsbarppt.com><br>
<b>Subject:</b> [WSBAPT] Medicaid Estate Recovery w/Private Refinancing of a Reverse Mortgage & a Tenancy-in-Common Arrangement<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal"><span style="font-size:12.0pt">Can o' worms time:<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt">C's elderly parents' guardian established a trust for the elderly parents, deeded their home to the trust, and reverse mortgaged their home in order to pay for their care (I have no idea why the guardian chose
this path instead of turning to medicaid). The reverse mortgage grew to $245k before both elderly parents died. The trust then directed that the house be distributed to C and C's (B)rother, which was completed last month and title is now held by C & B as tenants-in-common. <o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt">B is 65 years old, disabled, and on public benefits (medicaid long-term care), and the reverse mortgage is now due and owing. C has resources and wants to pay off the reverse mortgage in order to allow B to
remain in the house for the remainder of his life, and because a primary residence is not disqualifying for medicaid, this seems like it will work just fine. C wants to take a Note for the payoff of the reverse mortgage, 15 year amortization but with no installments,
3% <i>per annum </i>interest, and secure the note against title via standard form DOT.<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt">Now, the questions:<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt">(1) Would the Note would have priority over a Medicaid lien for B? C does not want to be on the hook for B's medicaid debt or to lose repayment of the Note.<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt">(2) With B & C tenants-in-common due to inheritance from parents, medicaid estate recovery for B would only apply to half of the remaining equity in the real property, correct?<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt">I just want to make sure that this structure will work. Client wants B to have the support he needs without having to lose the house. Just trying to navigate to the best option available.<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Arial",sans-serif">Best,<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Arial",sans-serif">David J. Faber<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Arial",sans-serif">Faber Feinson PLLC<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Arial",sans-serif">800 Polk Street, Suite B<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Arial",sans-serif">Port Townsend, WA 98368<br>
(360) 379-4110<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p>
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