If the Rent on My Mother’s House Goes to My Niece, Will that Cause a Medicaid Problem?
I am my mother’s Power of Attorney. She is 99 years old and in assisted living. She has enough money to cover her costs there for approximately two more years. She has her home in a life estate with it going to her granddaughter, my niece, after her death. The granddaughter has taken possession and has it rented with proceeds going to herself.
My question is: How will my mother be taken care of after her savings is gone, and how does the rent that went to the granddaughter come in to play? Will the accumulated amount of rent cause a problem when applying for Medicaid?
Yes, it might. States apply the Medicaid program differently and your state’s program may or may not cover your mother’s assisted living facility once her money runs out. It would make sense to discuss this with the assisted living facility now since there may be a waiting list for lower-income slots at the facility. If they don’t have anything available, your mother might have to move to a nursing home when her savings run out since it would be Medicaid covered.
But when your mother applies for Medicaid, whether at the assisted living facility or in a nursing home, the rental income going to her granddaughter could well be a problem. As the owner of the life estate, your mother is entitled to the rental income. Every month that her granddaughter keeps the money will likely be treated as a gift and could cause a period of ineligibility for benefits. And, of course, if your mother were receiving the income, she may be able to stay in the assisted living facility longer given that the rules are applied somewhat differently from state to state, I recommend that you consult with a local elder law attorney for a more definitive answer.