Life Estates and Mortgage Lenders

[Shaylee]

There is no such thing as "joint tenants in common".

In NY, property may be held as "Tenants in Common", in a "Tenancy by the Entirety", or as "Joint Tenants with Rights of Survivorship".

I am not familiar with those terms so I'm not sure? It's considered a single family home despite the addition (shared kitchen) But I'm not sure that has anything to do with what you are asking!

 

[LdiJ]

I am not familiar with those terms so I'm not sure? It's considered a single family home despite the addition (shared kitchen) But I'm not sure that has anything to do with what you are asking!

When more than one person owns a home, the deed would read something along the lines of "John Doe and Jane Doe as joint tenants with right of survivorship" or "John Doe, Jane Doe, Jim Smith and Mary Smith as tenants in common"...or other variations. Any time its joint tenant with rights of survivorship the property automatically belongs to the other owners when one of them passes away.

We want to know what your deed says.

 

[Shaylee]

When more than one person owns a home, the deed would read something along the lines of "John Doe and Jane Doe as joint tenants with right of survivorship" or "John Doe, Jane Doe, Jim Smith and Mary Smith as tenants in common"...or other variations. Any time its joint tenant with rights of survivorship the property automatically belongs to the other owners when one of them passes away.

We want to know what your deed says.

The right of survivorship sounds the most correct for our situation, however I will have to look at the deed to say for sure. How does that effect things?

 

[LdiJ]

The right of survivorship sounds the most correct for our situation, however I will have to look at the deed to say for sure. How does that effect things?

Well, if its right of survivorship it would automatically pass to the other owners if one of you dies, therefore its a little easier and a bit more protected as it would not have to go through probate. Also, Medicaid will not attempt to take the house if there are other owners living in the house and one of them has to go into a nursing home. Yours is a bit of an unusual situation and I am not sure if Medicaid would really try to interfere with the house under those circumstances.

Also, unless you all put a large down payment on the house there may not be much of anything for Medicaid to go after. They can only go after the share of the equity that the one person would have.

So, if you bought a house for 500k and put 50k down after closing costs etc. you might have 30k in equity. That is only 7500.00 each. If mom has to go into a nursing home I suspect that between you, your husband and your dad, you could figure out how to pay out mom's share of the equity and make Medicaid happy, assuming that they would even go after that small of an amount of equity.

 

[Shaylee]

Well, if its right of survivorship it would automatically pass to the other owners if one of you dies, therefore its a little easier and a bit more protected as it would not have to go through probate. Also, Medicaid will not attempt to take the house if there are other owners living in the house and one of them has to go into a nursing home. Yours is a bit of an unusual situation and I am not sure if Medicaid would really try to interfere with the house under those circumstances.

Also, unless you all put a large down payment on the house there may not be much of anything for Medicaid to go after. They can only go after the share of the equity that the one person would have.

So, if you bought a house for 500k and put 50k down after closing costs etc. you might have 30k in equity. That is only 7500.00 each. If mom has to go into a nursing home I suspect that between you, your husband and your dad, you could figure out how to pay out mom's share of the equity and make Medicaid happy, assuming that they would even go after that small of an amount of equity.

Unfortunately, we did put a sizable down payment, more then half. My parents used most of the proceeds from the sale of their old house, and we put down a chunk of our savings. I don't have exact number in front of me, but the total cost of the house was around 396,000. My parents put 200,000 of the proceeds from their home towards it, and we did around 40,000. Not sure what the closing costs were. We currently owe around 155,000, which my husband and I are paying off. These are all general estimates so if the math doesn't work that's why! I don't have access to the paperwork at the moment so I'm operating purely on my memory. But I guess the bottom line is we do have a lot of equity and why were hoping to get the life estate. I assume the equity also increases over time as we make our mortgage payments as well.

Our concern too is that if my mom goes into a nursing home, they blow through my mom and dad's retirement savings and assets first, they can't touch the house while my dad is alive, but after he passes can they come after 50% of the equity at that point?