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Financial Planning / Tax Strategies
|Subject: Re: House transfer: Father to Sons||Date: 6/21/2006 5:21 PM|
|Author: JAFO31||Number: 87500 of 121219|
bigdogsfo: "This is in reply to JAFO, but thank you to all who responded. As I hoped, this dialog has brought issues to bear that none of the three of us had considered before. I have 2 follow-up questions for the board:"
<<<1) In addition, no one mentioned the look-back periods on gifts for making determinations for eligibility for Medicaid. I realize that we do not have the whole picture, but if Dad suddenly needed care, he could be SOL.>>>
"He's SOL now."
We have slightly different definitions of SOL, then. Right now, he owns the house and could sell it and use the resulting funds to pay his own care.
Your plan has him divesting himself of the fee simple title to the house and Most (if not all) of his equity in the house. If your plan is implemented, he would no longer be able to sell the house (at least not without consent and signatures from you and your brother) , and most of the proceeds from any sale would probably not flow to him.
"This was the genesis for the idea -- at the suggestion of the Estate Planning Professional. My understanding is that once Dad's ownership of the house he lives in is transferred, the clock starts ticking for the Medicare look-back-period."
That is what I understand (just remember that estate planning and elder law are not my forte), with the either a 3 or 5 year lookback period depending upon the terms of the transfer.
"Assume he has no other tangible assets. So if he needs to go to an assisted living facility (more likely than a nursing home in the short term), we could use the funds from the sale of the house to fund Assisted Living."
Or not, depending upon what you and your brother decide. I do not want you to take this the wrong way, but if I am your dad, I would much rather own the house and control my own fate, then not own the house and depend upon the behavior of my two sons (no matter how much I love them and generally trust them). To me, depending upon the kindness of whomever (even if relatives) is definitely SOL.
"If and when the time comes for Nursing Home Care, the look back period will have begun, hopefully years before for Medicare eligibility."
That is what I understand.
"Have I got that right?"
As best as I understand it.
"2) What should one expect to pay an attorney to create documents for either a revocable trust with the son's as co-trustee's or a good durable power of attorney?
Take in to account that we live in California, in a major metro area. I understand any replies to this question will be conjecture as space prohibits more detail. A wide range is fine. I'm just trying to get a ball park figure to start with."
A good durable power of attorney probably should not be more than a few hundred dollars. A trust, even if relatively simple, is a more involved document --- I am guessing $500 to $2000.
Bob78164 is a California lawyer who sometimes posts here. Also, IIRC, peter (ptheland) is also in California. If I ommitte any regulars from California, my apologies.
If your dad does not have a will in place, now may be an excellent time to get the whole package -
will, possibly a revocable trust, durable power of attorney, medical power of attorney, and directive to medical service providers (or whatever the local name is for the document regarding life support, feeding tubes, and extraordinary care) - for your dad. I am wildly guessing $500 - $3000 dollars for the entire set.
Yes, I am a lawyer, BUT THIS IS NOT LEGAL ADVICE; it is only general information. NO CLIENT RELATIONSHIP IS INTENDED TO BE CREATED, NOR IS ANY SUCH RELATIONSHIP SO CREATED. FOR SPECIFIC LEGAL ADVICE YOU SHOULD TALK TO A LAWYER IN YOUR AREA.
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