Spouse terminally ill; how do I protect our rental property investment; should I remove his name from deed?
April 27th, 2010 | 
Author: If mу spouse ѕhουld bе admitted tο a nursing home, саn I protect ουr rental property investment bу removing hіѕ name frοm thе deed? Or wіll thе government force mе tο sell thе property tο pay fοr thе nursing home?
Posted in Rental Properties
Make sure you have taken title as “joint tenants”, that gives you the right of surviorship show he pass. You should each have a will stating whom will receive your assets. I suggest going to an estate attorney. They can help you set up the estate so you don’t pay inhertance taxes and such. It’s too vital for you in later years.
Form an LLC and have it hold ownership. Unfortunately, your spouse probably can not qualify for key person life insurance at this point so you will have to forego that part. Make yourself President of the LLC and you shouldn’t have any issues. Double check for laws in your state but.
Removing his name from the deed may not help you in the event of medicaid, because it would still be in yours.
You could look at moving the asset into a trust, or transferring it to a family member, but medicaid can go back a certain number of years (I reckon it is 5), and invalidate the transfer if it appears to have been done simply to hide the asset.
I know this is a canned answer, but you REALLY need to see an attorney now, because by the book plotting now will stop financial ruin later.
So sorry to hear — such a hard time for you both.
To protect your property and income, form an LLC and transfer ownership of the property to the LLC (a New Mexico LLC is particularly excellent, & it could own property anywhere in US). You must then establish a separate bank account for the LLC to deposit income and pay expenses.
You two also need wills. He needs to do a “durable power of attorney” so that you can handle matters if he becomes too ill to manage. And he needs a “living will” to prevent wrangling with other family members over life help issues – he will specify just so what his desires are.
You cannot simply transfer assets out of a persons name to get public aid. There is a lookback period of a number of years that could make him disallowed. And if you are in a community property state, everything is shared between spouses, so transferring it force achieve nothing anyway.
They may not force you to sell, but they could place a lein on it so you cannot sell it without paying off whatever his half would cover to the state.