In this Elder Law Minute, Wes Coulson discusses how to help single or widowed individuals utilize the money in their assets.
Transcript:
Hi! I’m Wes Coulson from Dent-Coulson Elder Law, proudly serving clients throughout the St. Louis metropolitan area and beyond. I’d like to welcome you to our Elder Law and Estate Planning Minute. We do these to help educate people, give them some little tips, and especially to let them know the questions they need to ask, things that they’ve maybe not thought of. Our thought on that is that we can help you best if you realize the things that you need help and that we can help you with. So I hope you enjoy. Thanks!
This is the last of our series of videos that I call our “Medicaid Planning Case Studies”, and the situation I want to talk about today is one in which a lot of people either think that they don’t need help, or that there is nothing that can be done. And that’s the not unusual situation in which a single or widowed has, essentially, run out of money or close to running out of money, but they still own their place of residence.
When they apply for Medicaid they are told, “Well, you don’t have to get rid of your residence, it’s an exempt asset”, and that’s fools gold, okay, and here’s why. What they don’t tell you is that they are going to put a lean against the property so that if it is ever sold during your lifetime they’re going to take the money to get back all of the Medicaid benefits they’ve paid for you and, if you have extra money, they’re going to make you spend that down, too. And even if it’s not sold during your lifetime, they’re going to, if necessary, open an estate to make sure they get their money when you die. So, basically, your house is a sitting duck. So, what can we do?
Well, in a lot of cases, what we will do, using the strategy of giving some money away to cause a penalty, but dealing with it by creating some income, is if you have a family member, or family members, able to do it, we will arrange a part-sale and part-gift of the house. The gift part of it is always going to be more than half of the value of the house, so people need to come up with less than half of the money. That makes it, by the way, a whole lot easier to get a mortgage loan against the property. That’s the step that it takes to move that residence out of harm’s way, once it’s out of harm’s way, the family member who has gotten the property is then free to turn around and sell it to the third party.
So, in short, what we can accomplish in that situation is, even if you don’t have any money, if you have, say, a $150,000 house, we can protect, probably, somewhere between $75,000-$90,000 on the equity value of that house. So, is it worth doing? Absolutely, it’s worth doing. So if that’s a situation that you face, give us a call, we can help. Thanks!
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Dent-Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Dent-Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (618) 632-7000 (IL) or (314) 567-9292 (MO), or Contact Us and we will get in touch as soon as possible.
