Photo by Zoshua Colah on Unsplash

Question:

My grandmother passed away in 2001 in Massachusetts and died intestate leaving her house. My uncle and mother are her direct descendants. My uncle lives in the house but is currently ill with cancer, heart, and kidney issues but is recovering from surgery in a rehab facility and needs to go home soon to receive cancer treatments. If he stays in the rehab facility they won’t cover the cancer treatment.

The house is in need of major repairs for him to live there and he does not have the means to pay for the repairs himself. He’s been on Medicaid for many years and lives on a very low income. I could help get the home repaired and that would allow him to live there and and receive the cancer treatment he needs but I’d need to get the house titled in my name and take a home equity line of credit out to pay for the repairs. The house would normally go to both my mother and him after my uncle’s death and they  are both will sign over their interest in the house to me.

Or it might be better to put the house in all our names and I could apply as a co-applicant on the credit application. I would qualify for the Medicaid asset recovery waiver for the house as well for being under 400% of the federal poverty guidelines. I’m just not sure which is the best route to take with the title of the house at this stage since he’s on Medicaid and I don’t want to cause him to lose his coverage or risk me owing money on a house that will get partially taken when he passes away.

Response:

There’s a few issues here. Let’s try to unpack them.

First, was your grandmother’s estate probated? If not, it should be now in order to put title in your mother and and uncle’s names. Since your grandmother died intestate — without a will — the house passed equally to your uncle and your mother as tenants in common.

Second, your mother and uncle own the property as tenants in common, or will once the probate is complete if that hasn’t been accomplished yet. This means that when your uncle dies his estate will have to be probated to pass title to his heirs and it also means that his half the house will be subject to MassHealth (Medicaid in Massachusetts) estate recovery. This can be avoided by changing the title from tenants in common to joint tenants. That way, upon your uncle’s death his share of the house will pass automatically to your mother without going through probate and without being subject to MassHealth estate recovery. (She will still have to record his death certificate and an affidavit of no estate taxes due at the registry of deeds. Also, this plan won’t work if your mother dies before your uncle, but that sounds unlikely.)

Third, if you need your name on the deed to get financing, your mother can transfer her interest to you without a MassHealth transfer penalty for your uncle. You should still maintain the joint ownership with your uncle. Your uncle could also transfer his interest to you without a transfer penalty as long as he remains living at home, but that’s risky since it would make him ineligible for MassHealth-covered care in a nursing home for the subsequent five years. (The rules are different for MassHealth in the community and MassHealth coverage of nursing home care.)

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