Question re house

Discussion in 'General Discussion' started by sara j, Mar 8, 2007.

  1. sara j

    sara j Guest

    My Father in Law had a stroke and is currently hospitalized. He has about 75 days left in skilled nursing that will be covered by medicare and insurance (hopefully). He will be permanently placed in nursing home (or assisted living which is doubtful). I know he can't file for A and A until he is paying his own med expenses. His income is 2000/month and NH will be 7000-7500. He has about 50,000 in assets and he owns a home worth about 200,000. I have read the home is excluded, but if we sell the home while we are waiting for him to be approved for the A and A, then does he have to spend down to 80,000 to qualify for A and A? What if he gets approved for A and A and starts receiving benefits, then he sells the home? Does he then go off A and A till he is below 80,000 again?
    Thanks so much
    Sara
     
  2. mdelaney

    mdelaney Newbie

    What state does he live in? You should also be concerned about Medicaid eligibility in addition to A and A eligibility. State rules on Medicaid vary.

    Michael DeLaney
    DeLaney Law Offices, Ltd.
    14524 John Humphrey Drive
    Orland Park, IL 60462
    mdelaney@delaneylawoffices.com
    http://www.delaneylawoffices.com
     
  3. sara j

    sara j Guest

    He currently is hospitalized in MD but we want to move him up to PA where we live. I think both states require assets below 2500 and would require we sell the house and spend down or sign the house over to them.
    Thanks
    Sara
     
  4. VAAnswers

    VAAnswers Newbie

    Depending on his age, the net worth ceiling could be lower than $80,000. The VA gives it adjudicators certain latitude on the net worth issue. They must determine the likelihood that the individual in question will outlive his/her assets. The house sale proceeds will not be counted as income, but they will become part of his net worth, if he keeps the money in his name.

    If he begins receiving A&A and then sells the house, it could mean that he will be no longer eligible for A&A, depending on what he does with the money. Recipients of A&A must fill out annual Eligibility Verification Review forms in order to determine if income and expenses have changed during the previous year.
     
  5. Tom

    Tom Newbie

    So, just to clarify for my pea-brain, there are no circumstances where an appicant can retain eligibility after the sale of their home? Assuming their net worth will exceed the $80,000 threshhold because of the home sale, the recipient would now be disqualified due to this increased net worth, even though the increase came from a previously exempt asset? Are there any accepted remedies to this problem? It must be a rather common issue as veterans or their surviving spouse sell their homes.

    Thanks for any help and thanks for this site!
    Tom
     
  6. VAAnswers

    VAAnswers Newbie

    How the VA views money from the sale of a house depends on what is done with the money. First of all, money from the sale of the home (unless it is a business transaction or done in installments) is NOT considered income (unless the payment exceeds the sale price of the home.) Once the money is acquired, if the individual chooses to reinvest it in the purchase of another home, the VA will consider this simply a conversion of assets. No harm, no foul. BUT, if the individual instead places the money into a savings account or otherwise invests it then, yes, the VA will likely view that as net worth, thus prompting a determination of whether this new asset permits continued payment of pension. There are, of course, things that the individual could do with the proceeds from the home that would eliminate the net worth issue, but that requires a savvy financial planner. Bottom line: if an asset is in the veteran's name and can be liquidated by him for his personal use, it is part of his net worth period (unless, as previously stated it is his primary residence or his automobile.)
     
  7. neilfl9

    neilfl9 Newbie

    Since the probable purpose for the sale of the house is to provide income, wouldn't it be more advantageous to get a "reverse mortgage" or a home equity loan ("line") to tap into the home's equity? Since the VA doesnt't look at a home (personal residence) or personal vehicle(s) as assets for determining eligibility, this wouldn't considered as an asset or income if it was used to pay expenses and not deposited in to a bank account.
     
  8. sara j

    sara j Guest

    I think for a reverse mortgage that he has to be living in the house which will not be the case in our situation. And I think that whatever he does with the proceeds of the house will be looked at by the state for 5 years to determine eligibility for Medicaid. So basically, the nursing home will get his money and after xxx years when it runs out, he will go on Medicaid.
     
  9. Dru

    Dru Newbie

    What if the ONLY purpose for selling a house is to pay for assisted living expenses? -- my Mom's monthly income and the A&A benefit will fall about $1000 short per month of being sufficient to cover the monthly AL expenses. In this case, would the income from the house sell disqualify her?
     
  10. bumblebee

    bumblebee Newbie

    My MIL is approved for the VA A&A benefit. She has not received her first check yet. Three weeks ago her home sold. The money will be used to pay for her living expenses in an assisted living. We contacted a Senior Specialist in our area and he deals with the VA on a daily basis. We are putting the proceeds from the sale of the home into a "Special Needs Trust". This will keep her from becoming ineligible. The Specialist will notify VA of the change and she may be ineligible for 1 month, but will re-establish eligibility.
     
  11. harwich37

    harwich37 Newbie

    For what it is worth, I would suggest placing the house into an irrevocable grantor trust and selling the property from the trust.
     

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