Q: She is almost ninety years old and they have spent most of their savings on home care- sitters and supplies and such. We were going to inherit the home later anyway. (Donegal, PA)
A: If there is any potential of either of these people needing to apply for Medicaid funding for their hospital or nursing care within the next five years, you should consult with an attorney versed in Medicaid regulations before you do anything. If Medicaid is a foreseeable issue, the general rule would be that this home should not be gifted to you and only purchased a market value with careful documentation such as appraisals, photographs, repair bills, etc.
Q: To prevent disputes after my parents pass away, my parents want to sell the house to my sister. How is the easiest way to do this? I have a sister that is crazy and we do not want her to cause chaos over the house when my parents are gone. I am hoping that a straight out sell will supersede any property rights that said sister may have. My younger sister has agreed to purchase the home and take control of my parents’ living expenses. (Pittsburgh, PA)
A: f it is the desire of your parents to sell the house to your sister, and they are not doing this under any stress or pressure from other family members, then here is what I can say. First, if it is even remotely possible that either parent may need to apply for Medicaid to fund their nursing care within the next five years, then they cannot sell the house under fair market value. If sold under fair market value, your parent could be disqualified from receiving Medicaid benefits. Your parents need to consider that if this house is their most significant asset, or one of the more significant assets that they possess, the proceeds of it can never be used to fund their nursing home care. I strongly suggest that your parents consult with a local lawyer versed in Medicaid regulations. The money you spend on the consultation may be well worth the advice you receive on preserving at least some of your parent’s money. Additionally, be aware that at least in Allegheny County, they may lose any applicable senior citizen’s taxes. Your parents should also be aware that if your sister is ever sued and would have a judgment placed against her, it would act as a lien on the home. Transferring the family home to a child or children for financial or estate planning reasons, should be done with the advice of counsel and must take a multitude of facts into consideration, including but not limited to the parents entire estate value and income, their health and their intentions on equitable
Q. Can an executor sell the home in the estate to a co executor at a discount without approval from the beneficiary?
A. The last time I visited that subject here in Allegheny County, an executor needs to seek court approval to purchase real estate owned by an estate. It is a conflict of interest for the executor to sell realty to himself or herself. If the beneficiary is in agreement with it, and the agreed upon sales price is not ridiculously low, things should go well with the judge. If the beneficiary is not in agreement with it, there could be a problem. The judge may require a hearing with notice provided to the beneficiary to attend. In this case, the purchase price should be fair or at least reflect being close to fair market value. Real estate appraisals may be required.