I inherited my father’s house with my siblings, but the maintenance and the taxes are too high. How can I get rid of this property without upsetting my family?

By Quentin Fottrell

“I have little or no interest in using the house: I’m not in love with the area. The house needs repairs and maintenance, as none of us live there full time.

Dear Quentin,

My dad gifted his home to his four kids too late to qualify for Medicaid (it was in the 3 year window) and pay for his retirement home. Three of my siblings took a HELOC to pay his bills and keep the house. I didn’t have the same desire.

I paid my quarter, about $6,000. At the request of my older brother and executor, when my father passed away, I also signed a $10,000 life insurance claim, which only the siblings received. I assume the policy was purchased before my two younger siblings were born.

I have little or no interest in using the house: I’m not in love with the area. The house needs repairs and maintenance, as none of us live there full time. The older brother now sends the “budget” for next year’s upkeep, about $2,000 each.

A brother can’t pay anything because he’s broke. I retired this year and have not budgeted for the upkeep of this property. I’ve only used it once in two years, but I’m clearly expected to continue paying for the upkeep of my late father’s house.

I’m paying my share of property taxes and the rest of the HELOC that the third brother is too broke to pay, but I wish there was a way out of those expectations without just giving up my share for nothing. I don’t think I can sell my neighborhood because it’s condominium.

I don’t see a good way out without causing a permanent loss of family goodwill. Do I have good legal options, other than just giving my share?

daughter and brother

Dear daughter,

It’s not an uncommon dilemma: not respecting the look-back period on Medicaid (more on that later) and the dispute between siblings of diverse means trying to collectively run a family home or vacation home that their parents left them.

You can either give away your share, ask your financially stable siblings to buy you out, or sell the property, but you need their permission to do so. You would have to initiate a forced sale of the property – a division lawsuit where the property is sold under the supervision of a court.

In such a lawsuit, all of your siblings would have the opportunity to show whether they contribute to property maintenance, HELOC fees, and property taxes. You may take this step and, seeing the writing on the wall, your siblings agree to sell.

The best time to make a decision on this was, of course, when your father made the decision to offer you the house. You don’t give the value of the house, but if you thought it would lead to unsustainable expense or discord between your siblings, you could have refused.

A sharing action would obviously do just that – create ill will among your siblings, perhaps especially for that sibling who cannot afford to contribute financially. If you sit with your siblings in the same room (or Zoom (ZM)), you may all be able to see eye to eye.

The problem with inheritance, as with life, is that people often only see a situation from their perspective. If you explain how and why it is difficult for you to keep this property, you may be able to reach a peaceful resolution, even if it means giving up your share.

It is a cautionary tale. Nearly 40% of older Americans will have “moderate needs” for long-term care, while nearly a quarter will have “minimal needs” for such services, according to the Center for Retirement Research whose researchers analyzed two decades of data.

Medicare rules

For others reading this: Recovery rules vary by state, and Medicaid is usually the last resort for long-term care. As your family discovered, a Medicaid recipient must spend their assets and resources and can only maintain their home within certain limits of its value.

Lookback rules also vary by state. There is a penalty period if, for example, a house was sold too soon after the future Medicaid beneficiary entered long-term care because proceeds from your father’s house could have been used for his care.

“The date of the Medicaid application is the date from which the look-back period begins,” states the American Council of Aging. “In 49 states and DC, the look-back period is 60 months. In California, the look-back period is 30 months.”

“As an example, if a Florida resident applies for Medicaid on January 1, 2022, their lookback period extends for 60 months through December 31, 2016,” the nonprofit adds. “All financial transactions during this period will be subject to review.”

Looking back doesn’t just apply to real estate. It also includes “money given to a granddaughter for her high school graduation, a house transferred to a nephew, collectibles sold for half their value, or a vehicle donated to a local charity” , says the ACA.

“Even payments made to a personal care assistant without a formal care agreement or assets that were given, transferred, or sold at fair market value by a non-claimant spouse may violate the look-back period and result in a period of ineligibility. to Medicaid,” he adds.

Your family has wandered into an area that has been occupied by many families before you: Medicaid rules and homesteads. It may seem stressful to deal with this now, but rest assured that you are not the first person to face this situation and you will not be the last.

Check out the private Moneyist Facebook group, where we seek answers to life’s trickiest money problems. Readers write to me with all sorts of dilemmas. Ask your questions, tell me what you want to know more or weigh in on the latest Moneyist columns.

The Moneyist regrets not being able to answer the questions individually.

By emailing your questions, you agree to have them published anonymously on MarketWatch. By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including through third parties.

Read also :

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“I couldn’t have done it without him”: I built a real estate portfolio of 23 units while we were dating. How much should I give my fiancé in our prenup?

-Quentin Fottrell


(END) Dow Jones Newswire

09-30-22 0916ET

Copyright (c) 2022 Dow Jones & Company, Inc.

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