I helped a couple today from Irving, Texas. It’s a really sad story. Betty has Alzheimer’s and has moved in with her brother and his family. Before moving in with her brother, Betty got some really bad advice. She had heard that in order to qualify for Medicaid and to have Medicaid pay for her nursing home care, she couldn’t own a residence in her name. So, she deeded her residence to her son, Larry and daughter-in-law, Rachel. A few years ago, the Larry borrowed around $500,000 from a local bank to start a new business in Dallas. The bank required that Larry and Rachel both personally guarantee the loan, which they did. The business recently stopped making payments on the bank note and closed its doors. In order to protect their assets from the bank’s collection on the personal guarantee, Larry and Rachel had to file personal bankruptcy. Since Betty’s house is now in Larry’s and Rachel’s name, it has become an asset of their bankruptcy estate and will likely be foreclosed upon to pay the bank.
Had Betty consulted with us, we would have advised her against deeding her home to Larry and Rachel for the very reasons that occurred. There are several ways that she could have qualified for Medicaid and maintained control and ownership of her home. Most of them involve the use of Trusts.
If you are interested in learning more about protecting your assets and your home while qualifying for Medicaid, contact us for an appointment.