Selling Property to Pay for Long-Term Care

My mother-in-law is in declining health and needs to move into long-term care, which would require self-pay at about $12,000 per month. She owns a piece of land worth roughly $280,000. Given the costs, I think selling the land would be the best way to cover her care. However, my wife has five siblings, and only two of them have any income, so it feels like a complicated situation.

MIL might have enough in savings to cover just one month of care. I also have an inherited IRA from my parents, but I really don’t want to dip into that unless absolutely necessary. We’re also unsure if my MIL would be considered legally incapacitated at this point, but if she is, we’re wondering how we would go about selling the land in that situation.

We have no clue what her will says about the land, and I’d like to avoid dealing with this through probate. Does anyone have experience with this kind of situation or any advice on how we should proceed?

It sounds like you need to consult with an elder law attorney as soon as possible. They can help navigate everything from selling the land to Medicaid planning and asset protection. Avoid using your inherited IRA if at all possible. You’ll also want to ensure power of attorney is sorted out before your MIL becomes incapacitated, if she hasn’t already. Time is really of the essence here.

@Meech
The power of attorney is already with my sister-in-law, but she’s not someone we fully trust with this kind of responsibility.

Nyle said:
@Meech
The power of attorney is already with my sister-in-law, but she’s not someone we fully trust with this kind of responsibility.

Even if your sister-in-law has power of attorney, it’s still worth seeing an elder law attorney. They can help clarify what actions can be taken and offer advice on how to handle the property sale without involving your personal funds. Definitely avoid using your IRA; once that money is gone, it’s gone. The attorney will also explain Medicaid’s five-year lookback rule, which could affect asset transfers. You may also want to look into PACE programs that provide in-home care, which might be a more affordable alternative to full-time care in a facility.

@Vanya
Thanks for the advice. I’ll start looking into elder law attorneys and see what options we have with Medicaid and care programs.

Do NOT use your retirement funds for her care. I repeat, do not! Your IRA is for your future, and you don’t want to burn through it to pay for someone else’s care, especially when there are other options like Medicaid. If her assets (like the land) have to be sold, that’s something that will be handled, and Medicaid will use those funds for her care before stepping in. It’s already too late to protect most of her assets from Medicaid at this point, given the five-year rule.

You really need to speak with an attorney who specializes in Medicaid and elder law. They will help you understand how Medicaid works in situations like this, and how the land will be used to cover her care. It’s important to get the legal side sorted out before making any decisions with the property. And as others have said, don’t touch your retirement funds for this.

@Charlie
I didn’t even consider Medicaid before this, so that’s definitely something I’ll look into with an attorney. Thanks!

My MIL was in a similar situation. She transferred ownership of her property to my wife and other family members so that she could qualify for Medicaid. It’s a pretty common approach in these cases, but it has to be done well in advance (at least five years before needing long-term care) to avoid penalties from Medicaid. It might be too late for that now, but consulting with a lawyer will give you a clearer idea of what your options are moving forward.

If she has a will, it might already contain an advanced directive regarding what to do with her assets if she becomes incapacitated. The executor could check for any such provisions. It’s definitely worth looking into before making any decisions about selling the land.

@Westley
We haven’t actually seen her will, so I’ll try to figure out who the executor is and see if we can get more information.