My parents are preparing to move in with my wife and I. My mom has Alzheimer's disease and it's getting too hard for my dad to take care of her alone. We plan to sell their home, and ours, and use the funds from both sales to find a place we can all fit comfortably. Are there any legal pitfalls that we should avoid in combining our assets? Should all of our names be on the deed to the new home? What if one or both of them need Medicaid assistance down the road?
You want to use a firm that does it all, from planning to Medicaid application. Be prepared for her 50% profit from the home sale to be hers for her care in the future. There may be a way around it but I wouldn't count on it.
Co-mingling your assets with that of one's parents could create a landmine of issues, especially if and when that parent(s) might need Medicaid later down the road.
If your parents give you money to help pay for the house, that could be viewed as "gifting". It may be better if your folks paid you "rent". Again, this is something an Elder Care Attorney could explain to the steps to take.
With your Mom having Alzheimer's, you need to see into the very near future that she will need a village to take care of her. I had to do that with my Mom as it would have been impossible for Dad, nor I, or even professional caregivers to take care of her at home. Mom was moved to long-term-care, and even through she was meer 90 lbs, it took 2 Staff members to safely transfer her, as she could no longer stand or walk.
Dad died, 'the youngest kids' convinced Mum to sell her beautiful condo and use the proceeds to help them buy a beautiful home with a suite for Mum. Sounds good right?
3 years later 'the kids' marriage was on the rocks, they divorced and the house had to be sold. Opps, Mum's name was not on the title ('I trust the kids'). She got nothing from the sale of the house, She wound up living the rest of her life in a low income apartment. Apparently the kids had convinced her to use a lot of her retirement savings to buy new furniture etc for the house.
You need a lawyer. One versed in Medicaid for a while. Members always suggest Eldercare lawyers but have been given wrong info concerning joint bank accts.
Ask the Attorney about options for managing the proceeds from sale of their home.
Depending on the current health of your parents (which sets up a timeline for possible need for a nursing home admission and Medicaid in the future) the Attorney may suggest that your parents buy a Life Estate interest in the new home you are buying.
Other Medicaid regulations to consider include the Caregiver Child exception for home transfers, which would exempt a transfer of the house if your parents owned the house and their adult child had lived in the house and cared for the parent needing Medicaid for 2 years before a nursing home admission.
Also consider a Caregiver Contract which would pay you for care, with reimbursement to you that is exempt from Medicaid transfer penalties.
Many other factors can fit into good Estate Planning and Elder Care Planning, since you have the foresight to anticipate future needs. If the Elder Law Attorney represents your parents in the sale and purchase closings, he or she will be able to coordinate everything for your family and help to optimize your resources.
Alzheimer's can mean that your mom could need skilled nursing care for a long period of time.
If your parents ever get to where one or both of them need Medicaid, there will be a 'look back' and if the combing of finances is within the time period, you would have to buy out your parents from the house.
Get expert advice.