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Woman signs home over to daughter as protective measure, has second thoughts

Woman signs home over to daughter as protective measure, has second thoughts

Q: My wife signed her home over to her daughter 15 years ago. She wanted to protect her home in case she ever went into a nursing home. She got paid less than $100 for the house.

We got married three months ago and her daughter now has a very controlling husband and they will not sign the deed back over to her. My wife wants the house to go to me when she dies. She is still living in the home.

What can we do to get the title to the home back in her name? We just revoked her will and I don’t know if that has anything to do with it.

A: Your wife’s situation is quite unfortunate. We’ve written about this many times and constantly let our readers know that they should be very careful giving up part or total ownership of their homes.

Your wife has made several critical errors. First, your wife’s daughter paid her only $100 for the home. While it’s likely that the true value of the home was far more than $100 at the time, it appears that your wife’s intent was to no longer own the home directly. She likely wanted the home to be out of her name to avoid losing the equity if she needed nursing home care.

Without going into too much detail, when a person needs nursing home care and has little to no assets, Medicaid will pick up the cost of the care. Medicaid in turn will look at the person’s finances over the prior 60 months (30 months in California) to see what funds might be able to be recouped. This is called Medicaid’s look-back period. According to the American Council on Aging, Medicaid does this “to prevent Medicaid applicants from giving away assets or selling them under fair market value to meet Medicaid’s asset limit.”

So, your wife didn’t want to have her home as an asset in her name and chose to get rid of it. If she had sold it, the money she received from the sale would have been used to pay for her nursing home care before Medicare would step in.

Now that she’s married to you, and presumably has a stronger financial situation, she wants her home back and her daughter (or your son-in-law) is reluctant to give it back to her.

Unfortunately, there’s not much legally your wife can do to force her daughter to transfer the home back to her. On the other hand, she can try to persuade her to transfer the title to the home back on moral grounds. We suspect that the daughter knows that your wife has decided to give the home to you when she dies, so she doesn’t have much of an incentive to give it back.

You might want to talk to a local estate planning attorney and discuss the circumstances surrounding the transfer of ownership to her daughter. The attorney will likely ask quite a few questions about the transfer, including when it was done, why it was done and what was said at that time. The idea behind the questions would be to determine whether the “sale” was not in fact a sale but an arrangement for the purpose of shielding assets from the reach of Medicare.

There may be other facts in play that the attorney may discover that could give your wife a better understanding of the chances of getting the property back and the process you could use to do that. Good luck.

(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through their website, bestmoneymoves.com.)

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