My parents got divorced ~15 years ago but did not split up the assets. Both of their names are still on the deed to the house that they bought while married. The house is fully paid off and currently worth about $250K . My mom lives in the house, my dad lives alone in a rented apartment. My dad is 67, disabled, hasn't worked in ~25 years, and his only income is social security of ~24k per year. He is not able to take care of himself well and has had to hire home heath aids. He has been chipping away at his savings and will be broke within the next 12 months. He will probably need to go into assisted living within a few years.
The concern is when he does run out of money, he won't qualify for financial aid / medicaid / other programs because he still owns "half a house."
Considerations
- Selling the house and splitting the money the obvious solution, but neither of them want to do this. Mom wants to continue living there and will not agree to sell. My brothers live there occasionally. Dad wants this to continue.
- My mom does not have the cash to buy out his half of the house.
- Dad living in the house is not an option. He has not lived there for ~12 years.
- Mom taking out a home equity loan to pay him out is not seen as a good option because she is retired and it would be hard for her to make the payments, and frankly I don't trust my dad with a lump sum of that amount. He is vulnerable to getting scammed or losing all the money quickly.
- Could remove his name from the deed and put it 100% in my moms name and dad gets nothing. Dad does not think this is fair.
- My brother has money and has verbally offered to "help my dad out with his bills" in exchange for his half of the house - we would remove my dad's name and replace with my brother and do a "tenants in common" deed between my mom and brother. Brother will not help my dad financially for free - he wants something tangible in return. This dilutes my inheritance when the parents die, but I don't care about that.
The other concern is I hear nursing homes / medicaid / social programs might have a look back period where even if he gets his name off the deed today, they will look back at his assets for the 5 previous years and this may still disqualify him, and the deed change may be viewed as him trying to "cheat the system" and hide his asset (even though he has no use of this asset). I'm not sure how much of a problem this actually is?
Any advice or other pitfalls to watch out for?
Submitted January 30, 2023 at 06:55PM by PrudentAntelopes https://ift.tt/PiOcCFX
