Families of elderly patients losing homes to TennCare

WBIR NBC-10 Knoxville ^ | 10/23/6 | SHEILA BURKE

[TommyDale]

If your mother signed off on the house completely, it is not up to her to sell it, but your sisters. They could sell it and reinvest in in another house of equal value (less expenses), and avoid tax. And the "capital gain" is bases on the difference of the sales price and the value at the time of the transfer, so the base would be "stepped up".

[Mr. Lucky]

Because the nursing home expenses are paid by Medicaid, a state welfare program, while the medical expenses are paid for by Medicare, a federal insurance program.

[O6ret]

"That's what he told me, and he gave the house to me."

If he gave the house to one or more of the children, and did so legally and within the prescribed time period, then the state can't touch it. If, however, it was simply a statement, or if it was done the week before, then the state can and will come after it.

These eventualities can be foreseen and planned for. The house can be put in a trust for the kids and the parents given a lifetime right to live in it. It's perfectly legal provided this is done far enough in advance (typically 3 years) so it is not an apparent attempt to circumvent paying medical and final care bills. Legally, then, the house doesn't belong to the parents any longer and the state can't come after it.

[Alberta's Child]

I agree with you. There is nothing more damaging to the well-being of a free society than the delusional notion that "someone else" will pay for everything we need in life.

[Graybeard58]

Hardly, if they're coming after $280,000 when the "real costs" are likely a fraction of that.

The issue is whether the state should recover debts owed not whether the debts are inflated.

[shankbear]

Did she retain a life estate in the deed to them? That is a contract and is probably recorded at the courthouse. As I understand life estates, she could only sell what she has....a life estate, that is the right to live there until she dies. All she could sell would be her interest meaning that any purchaser would be acquiring an interest for the rest of your mom's life. When your mom dies then the house would revert to your sisters and they could do with it whatever they desire. Any buyer should beware of what they are buying.

[brytlea]

The state laws are all different, some have time limits. It really does pay to have an expert look at your situation, as I assume everyone here will, before they make a decision.
susie

[LZ_Bayonet]

"While I see your point, it's still sad when you consider that these folks probably played by the rules their whole lives and yet are still in a position to lose their home. While many in this country use medical services for free and no one goes after their heirs or family members."

They do not lose "their" home. They are gone. The kids don't get the cash from the sale of the house, but they didn't have to take care of the parents either. I see your point about others not paying anything for their care - and it's going to get even worse.

[wmfights]

"That was my father's dying wish - to hold onto the house, live in it, take care of it," said Nashville resident Judy Clifford, 66, one of three Henkel children. "That's what he told me, and he gave the house to me."
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Did the dad transfer title. The son says "he gave the house to me". Is there any evidence that the title was in the son's name? If so, I get very concerned about the state having the power to take someone's assets to pay for someone else's medical expenses.

[Alberta's Child]

It was my mothers dying wish not to die, but that didn't happen either.

That's the best point I've seen raised on this thread. LOL.

[VRWCTexan]

As long as is was not a "sham deal" to avoid this type situation, and it occurred 5 or more years in the past it's totally legal.

What is not legal is selling / transferring you house to your kids for pennies on the dollar (below fair market value)at the 11th hour just to avoid having it counted as an asset when needed to cover the cost of longterm health-care

[Graybeard58]

There are laws on the books governing how many years previous to the death the title must have been transferred. If the son had title prior to that time limit the state wouldn't have a claim.

[tomswiftjr]

You need to check on the state version of the Fraudulent Conveyance statutes. Love is not a valid consideration for a conyenance to be protected from a creditor who attacks the validity of the conveyance.

[wmfights]

"...apparently, in TN you cannot pass it on to your kids to avoid having it as an asset. I suspect they could have sold it to the kids, but I'm not sure."
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This is the one red flag I see.

[Sergio]

Oh I agree with you, my wife and I are currently paying on long term care insurance for our folks. Luckily, we are in a position to be able to do so.

I just find it ironic that it seems to be OK for taxpayer dollars to be spent for the medical care of non-citizens (which the government knows is write off), especially when you consider that the money used for non-citizen health care, was provided in part by the taxes paid by the deceased and their heirs.

[HaveHadEnough]

My mother signed over her house to my two sisters several years ago, I wanted nothing to do with it. Now mom wants to sell the house and move. My sisters have found out they will owe capitol gains tax if mom sells the house. Since it's not my sisters primary residence.

It's no longer your mother's house to sell. In any event, even if your siblings sold it at the request of your mother (something I would do), your siblings should take whatever taxes they owe from the proceeds of the sale.

[brytlea]

I can't answer your question from the article but:

In April, TennCare hired an Atlanta-based outside consulting firm to help find properties that deceased long-term-care recipients passed on to their heirs without going through probate. And when it does find the property, it's going to force open an estate.

Under Tennessee law, the property can pass to the heirs without going through a probate court. But if TennCare finds out about the property, it can petition the court to force open an estate, which is what happened in the Henkel case.

It would appear to me that this is the same as them passing on property they don't actually own at their death, since creditors (in this case the state) did not have the opportunity to file for what was owed. For instance, if your parents die with an outstanding balance on their Visa card, that gets paid before you get your inheritence from the estate. I see this as the same thing.

FWIW I think the term *family home* in the article is just used to make us all feel sorry for these folks. What the heck is a family home? This is the parent's house, and I think it's very telling that the writer tries hard to blur this fact.

susie

[shankbear]

If it is done outside of the 60 month period it is good.

[Shimmer128]

I don't agree with that either, but because that wrong is perpetrated doesn't mean the country should pay for all others too.
Good going, Sergio. Thanks for taking care of your own. :)

[patriot_wes]

"Now TennCare wants to sell the home to help recoup the roughly $288,000 that the state says it paid to take care of Mary Henkel in the nursing home before she died"

The operative phrase...