Mother is out of liquid funds and also needs assisted living. She has significant equity in her home which will fund assisted living for 4 or so years once sold. I was planning to front the cost until the home sale and reimburse myself.
My concern is the Medicaid 5-year look back. If she needs Medicaid once her funds run out will the reimbursement be a concern? Of course, I will keep receipts/invoices and reimburse myself to the penny, this is in NY state.
Regarding how to deal with fronting money… I’m with the others that having an elder law attorney well versed in NYS LTC Medicaid applications be used for this. They should be able to give options as to whether it’s best to do a Promissory Note or a Memo of Understanding or whatever other document could be best for NYS laws and Dept of Medicaid. You want to get on this asap as financial agreements like this are from the date of the document & it’s notarization going forward. For some States, they take the position that whatever we do or spend for our elders we do out of a sense of familial responsibility with no expectation of reimbursement.
Regarding her home, Medicaid is going to review its sale to check that it was sold at FMV/ fair market value and an “arm’s length” type of sale (so no FSBO to a family member for a lesser price). What is generally used for FMV is the assessed value of the home on the annual property tax bill. The reasoning is that if you pay the tax bill you are in agreement with the figures used to formulate the bill.
So is her home as it is right now without any work done to it, other than clearing it out, realistically able to sell for that tax assessed amount? Or sell for within 10% or so and sold as an “arms length” type of sale??? If so, consider yourself & mom extraordinarily lucky. Get it on the market with a Realtor and sold asap. So often Realtors will blithely assume that the seller will paint, replace carpeting, put in newer fixtures & appliances and do whatever else to have the home be more “market ready”. If that just isn’t happening, be clear on his when selecting a Realtor. It can be challenging to promptly sell an elders older home that has not been updated or renovated and has decades of delayed maintenance.
New York is a considered to be a state with a high asset threshold so your mother can keep approx. 31,000 in assets. And, since your mother will have a large amount of assets due to the sale of the house you will want an attorney to guide you on how to properly manage it.