Cut Your Living Expenses w/o Lowering Your Standard of Living

My last landlord was a social worker in a nursing home,I believe if there is a surviving spouse living in the residence it can't be attached for the bill or medicaid.
 

Giantsfan1954 said:
My last landlord was a social worker in a nursing home,I believe if there is a surviving spouse living in the residence it can't be attached for the bill or medicaid.
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I don't know about other states, but in CA even if there's no surviving spouse in the residence, up to $750K is exempted. I believe that with a surviving spouse that asset exemption doesn't have a ceiling.
 
StarSong said:
I've looked into this a little bit, and GiantFan, you're not kidding when you say this is very bad advice. Anyone considering this would be well advised to consult attorneys and financial planners who specialize in elder matters, plus do plenty of other research.

C'est Moi is correct in her statement about a person's residence being exempt from the Medicaid's asset limit.

IMHO, transferring a house or other assets to preserve an estate or avoid paying one's own medical expenses is no different morally or ethically than welfare, food stamp or other fraud against governmental agencies.

https://www.payingforseniorcare.com/medicaid/look-back-period.html
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I agree -- cheating is cheating.
 

Another thing to think about -- if your kids own the house and you pay rent to them, the rent is taxable income to them. IRS doesn't care about family relationships re rental income -- rental income is rental income, and if they don't report it and pay taxes on it they can be in deep doo-doo with IRS.

If I were the adult child, I wouldn't want to be in the situation we're discussing, either. Eversomuch easier to just step in and help mom as needed, rather than all the legal gyrations. If you trust them enough to give them your most valuable asset, you should trust them to help you as needed.
 
DaveA said:
Sorry folks - -too late for us. We gave the our home to our youngest daughter back in 1995 and our 2 families have lived there ever since. At that time we retained a life lease and an agreement that if the property was sold during our lifetime the amount would be split evenly. It's a home that has never been out of our family and for most of it's lifetime has housed 2 generations. You all know your family as I do mine. It's been 23 years now, the grandkids were born during that time and are now in college and high school.

We've been able to travel, sometimes being away from home for 6 or 7 months of the year. Never a worry about the property and in accepting the home the kids also took on all expenses to do with it. Heat, electric, taxes, maintenance, etc., so we have no living expenses in that regard.

Would I recommend this to others - -probably not as in many families it would create bitterness amongst the other children and some folks sadly, don't seem to get along that well with their off spring. It has been a God-send for us and probably one of the best life decisions that we've made. No problems have arisen and being surrounded by family is, IMHO, far preferable to finishing my days sitting among a group of old timers like myself with whom I have no connection. We all make choices and sometimes they work and sometimes not. We have been lucky with ours.

At almost 85, I haven't much time left, nor my wife who's 82. I hope my end will come in the same bedroom that we presently use. My grand-dad and mom both finished their days in that same room. My grand-mother in the hospital and my dad on the front lawn while
mowing. Since being built in 1921 our home has never left the family or been sold - -only handed down from one generation to the next. I
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Meanderer said:
What a great family story, Dave! It seems that your "lump of coal"turned into a "fabulous diamond"! Thanks for sharing it with us!:)
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I agree, great story Dave!
 
RadishRose said:
Anything can go wrong sometimes, that's for sure. I'm thinking these suggestions automatically assume everyone involved is on board and relationships are solid and stable enough to consider these scenarios. Something I'll think about later.
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It's an interesting consideration.
 
Butterfly said:
Another thing to think about -- if your kids own the house and you pay rent to them, the rent is taxable income to them. IRS doesn't care about family relationships re rental income -- rental income is rental income, and if they don't report it and pay taxes on it they can be in deep doo-doo with IRS.

If I were the adult child, I wouldn't want to be in the situation we're discussing, either. Eversomuch easier to just step in and help mom as needed, rather than all the legal gyrations. If you trust them enough to give them your most valuable asset, you should trust them to help you as needed.
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This is the point I was trying to make earlier; I don't want to burden my children with unnecessary expenses on my behalf. Thankfully I am not in a situation where I need any assistance, but I know I could depend on them if I were.
 
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It's all a matter of perspective...

From time to time HGTV would have a show about Americans moving to a foreign country to save money.
This irony is... much of the time, what they paid to buy or rent a house in a third world country was more
expensive than buying/renting in many places in the USA.

.
 
Neighbor years ago suddenly announced / joked that he and his wife were now at the mercy of their only child (daughter) and her husband. He had me laughing when he said they had to be VERY VERY nice to their daughter or would be living on the streets. They had turned everything over to the daughter.

Yes, there has to be that "trust" thing. Interestingly the daughter's husband was the local (small town) owner of the funeral home who had seen both the good and the ugly side of this topic.
 
I would never turn our home over to our daughter. She could have the best of intentions, but if she or hubby loses a job or gets in a financial bind, I don't want to deal with that.

It's best to trust in what we have done, our home and cars are all paid for, and that is the safest way to go. In a few years, we may sell our home and move into a retirement place and use our investments, savings, Social Security and home sale to keep us comfortable there.

Giving a child a home with a promise for us to live in it is enormously foolish and definitely never sensible. If you want to help your kids get a home, help them with a down payment on their own home; that's what we did.

Kids have no business helping themselves to what you've earned for all your life; your help is what it is to them, and no kid should ever, ever own your home with you still there.

Kids need to understand they are on their own and no, our home is not for her to house us.

That may be what parents do nowadays, but that will never fly with us. We can make our own decisions.
 
If you were lucky enough to live in the UK you could rent out a room and pay no tax. This might cover property tax and maintenance or help to do so.

[h=1]The Rent a Room Scheme[/h] The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else.
You can let out as much of your home as you want.
The upper limit of rent is £7,500 per year tax-free -
$13592.94 US.

Details at < https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme>
 
The Rent a Room Scheme

If you were lucky enough to live in the UK you could rent out a room and pay no tax. This might cover property tax and maintenance or help to do so.

[h=1]The Rent a Room Scheme[/h] The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else.
You can let out as much of your home as you want.
The upper limit of rent is £7,500 per year tax-free -
$13592.94 US.

Details at < https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme>
 
KingsX said:
.

It's all a matter of perspective...

From time to time HGTV would have a show about Americans moving to a foreign country to save money.
This irony is... much of the time, what they paid to buy or rent a house in a third world country was more
expensive than buying/renting in many places in the USA.

.
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....and did you know that you DO NOT actually own a home in Mexico? It belongs to the government and you're "renting" it from them for about 20 years but they can take it back at any time!

My hubby and I watch HGTV International House Hunters and we wonder if these people are still in these countries. There was a couple that wanted to build a hotel in Vietnam (I forget the place) but had never been there before. It was a small island and you had to ferry across to it. The island was a run-down filthy place with just a few "houses" (shacks, really). This couple had 2 small children and the places they looked at to live in were disgusting....but they were "only" $200/month. The one place was a shack with no running water and the toilet was a hole dug in the ground out back. I couldn't imagine taking 2 small children to a place like that.

Unfortunately, these people that go over to other countries to live because it's "cheaper" are so clueless when they get there and start looking for a place. Most of them want everything they had in the States...big kitchens, bath tubs, outdoor space, etc....and they're disappointed when they have to live in a crackerbox apartment that costs $2000/month!! What's wrong with these people???
 
Colleen said:
....and did you know that you DO NOT actually own a home in Mexico? It belongs to the government and you're "renting" it from them for about 20 years but they can take it back at any time!

My hubby and I watch HGTV International House Hunters and we wonder if these people are still in these countries. There was a couple that wanted to build a hotel in Vietnam (I forget the place) but had never been there before. It was a small island and you had to ferry across to it. The island was a run-down filthy place with just a few "houses" (shacks, really). This couple had 2 small children and the places they looked at to live in were disgusting....but they were "only" $200/month. The one place was a shack with no running water and the toilet was a hole dug in the ground out back. I couldn't imagine taking 2 small children to a place like that.

Unfortunately, these people that go over to other countries to live because it's "cheaper" are so clueless when they get there and start looking for a place. Most of them want everything they had in the States...big kitchens, bath tubs, outdoor space, etc....and they're disappointed when they have to live in a crackerbox apartment that costs $2000/month!! What's wrong with these people???
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I know several ex-pats who live in Panama and they do so very nicely. Gorgeous countryside, amazing fishing, spectacular bird-watching, inexpensive housing, low cost of living, inexpensive medical care, low restaurant and food prices, etc. Yes, there are some sacrifices. For instance, electricity can be iffy so they have generators in addition to being hooked up to the local power grid.

These are people who did their homework before moving and it's working out quite well for them.
 
Colleen said:
....and did you know that you DO NOT actually own a home in Mexico? It belongs to the government and you're "renting" it from them for about 20 years but they can take it back at any time!

My hubby and I watch HGTV International House Hunters and we wonder if these people are still in these countries. There was a couple that wanted to build a hotel in Vietnam (I forget the place) but had never been there before. It was a small island and you had to ferry across to it. The island was a run-down filthy place with just a few "houses" (shacks, really). This couple had 2 small children and the places they looked at to live in were disgusting....but they were "only" $200/month. The one place was a shack with no running water and the toilet was a hole dug in the ground out back. I couldn't imagine taking 2 small children to a place like that.

Unfortunately, these people that go over to other countries to live because it's "cheaper" are so clueless when they get there and start looking for a place. Most of them want everything they had in the States...big kitchens, bath tubs, outdoor space, etc....and they're disappointed when they have to live in a crackerbox apartment that costs $2000/month!! What's wrong with these people???
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Interesting... thanks for posting.

Many times I have watched HGTV buyers trying to save money spend twice as much in a third world country for less than half the size of my house here in urban North Texas. Oh, and they always want to live next to all the "shops and restaurants" [so much for "saving money."]

Most of HGTV's US home buyers are spoiled prima donnas who will cringe at the color of the counter tops but never look at the roof, HVAC or plumbing [not as sexy.]

But the most ironic of all are "tiny house" buyers who complain it's not roomy enough and the bathroom is too close to the kitchen [duh!]

.
 
My limited experience with trusts is that they are designed for wealthy people trying to protect assets above the IRS estate taxation limits, not so much for middle class people trying to save money or escape the Medicaid estate recovery.
 
Pookie said:
I would never turn our home over to our daughter. She could have the best of intentions, but if she or hubby loses a job or gets in a financial bind, I don't want to deal with that.

It's best to trust in what we have done, our home and cars are all paid for, and that is the safest way to go. In a few years, we may sell our home and move into a retirement place and use our investments, savings, Social Security and home sale to keep us comfortable there.

Giving a child a home with a promise for us to live in it is enormously foolish and definitely never sensible. If you want to help your kids get a home, help them with a down payment on their own home; that's what we did.

Kids have no business helping themselves to what you've earned for all your life; your help is what it is to them, and no kid should ever, ever own your home with you still there.

Kids need to understand they are on their own and no, our home is not for her to house us.

That may be what parents do nowadays, but that will never fly with us. We can make our own decisions.
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Well said, Pookie. I could not agree more!
 
My hubby and I were talking about this very subject this morning. I made the comment that if something happened to him first I wasn't sure where I'd go. Thank God we're both very healthy at 71/77 respectively...but who knows?? Anyway, I said I'd probably go back to the town in PA where we lived before we moved here to AZ 4 years ago. He said I would be nuts to go back to cold weather...and, yes, that would be the downside, but it would also be more affordable than AZ. I won't be getting his pension so that would cut my income drastically. I believe I would get his SS and not mine so I would have to be very frugal.

We talked about all the places we've lived and we did agree to rule them out for various reasons. He said the "kids" (his son and daughter who moved here from CA a couple years ago to be closer to him) would probably look after me, but they are his kids and even though they are "tolerant" of me, I don't expect them, or want them, to take care of me.
 
Colleen said:
My hubby and I were talking about this very subject this morning. I made the comment that if something happened to him first I wasn't sure where I'd go. Thank God we're both very healthy at 71/77 respectively...but who knows?? Anyway, I said I'd probably go back to the town in PA where we lived before we moved here to AZ 4 years ago. He said I would be nuts to go back to cold weather...and, yes, that would be the downside, but it would also be more affordable than AZ. I won't be getting his pension so that would cut my income drastically. I believe I would get his SS and not mine so I would have to be very frugal.

We talked about all the places we've lived and we did agree to rule them out for various reasons. He said the "kids" (his son and daughter who moved here from CA a couple years ago to be closer to him) would probably look after me, but they are his kids and even though they are "tolerant" of me, I don't expect them, or want them, to take care of me.
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It is very common for women to outlive their husbands and, often, the situation is as you describe yours. We have some friends in that situation. Their solution - becoming "roomies". It has worked - for years.
 
Not very practical. Do you know how many people can't trust their children with financial and estate matters? I read a story about a son who took over his mother's house and wound up putting her out...she was elderly too. People get very greedy and untrustworthy when money matters surface. Just watch what happens when someone dies and doesn't leave a will. Even for the children who can be trusted...many Gen X'ers today are having such a hard time keeping their heads above water and managing all they have to manage, like someone said...why would they even want that additional headache?
 
Uptosnuff said:
I have a different reaction to this than others on the board. My sister and I did this for our parents. This was in the early 1990s. My father had a MAJOR stroke that left him paralyzed and in a nursing home. They couldn't show that they had any assets, like a house, or the they would have to use it to pay the nursing home. We signed a paper giving us the house equally between my sister and I. The house was long paid for. My mother still paid whatever taxes there were, the utilities, etc. but it didn't show up as an asset for them. She lived there until she died, ironically before my father did. When my mother passed on, all my five siblings and I divided the proceeds from the house equally. We would not have thought to do anything differently.

So this type of thing can work out. I guess everyone needs to act like adults and not spoiled children.
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It's interesting that your mother's house was not counted as an asset since it was "sold". How long before she went into the home did you and your sister acquire the house? Here in Jersey, Medicaid looks back 5 years for all assets and counts them but they do have certain exemptions for homeowners and their spouses still living in the home. When my mother went into a home (I believe it was 2001) they looked back 3 years. For a few years she insisted that I have her savings bonds put in my name. I resisted for awhile then finally did it. We missed the look back period by about a year when she went in. She had just received an insurance payment from her brother's death policy of more than $26,000 and that was used as her payment for the first few months. N.J. has one of the highest nursing home costs in the country. But it got her acceptance in a very nice place and they opted to keep her there once medicaid kicked in. She passed after being there about 3 years.
 
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