Texas Medicaid rules around estate sale proceeds: Can someone share advice?

These referenced mortgages really make everything so much harder when Medicaid is involved. All I can say is talk to a Medicaid case worker and run this situation by them. Or consult with an Elder lawyer well versed in Medicaid.

None of my Moms belongings were worth anything so it was trashed, given away and her children took what they wanted. Hopefully someone on the forum has been in your situation and can help.

Westwind, unless your mom is upside down in the reverse mortgage, please don't just give it away. You can sell it, pay off the reverse mortgage and mom will have some assets to spend down but, that is better then letting all of her equity go. Believe me when I say she does have equity, RM pays pennies on the dollar, that's why the exist as for profit businesses.

Depending on the amount, she could self pay for a while, get a really awesome wheelchair, new bed, clothes, shoes, new hearing aids, glasses, a new recliner, a new TV or anything else she might need and not lose Medicaid coverage. If she spends it all in between statements, she won't even have to reapply.

I always think asking the source, her Medicaid social worker, how it works and what they can help with or spend some of mom's money on a CELA consultation is the best route to take

I’m going to approach this from a different perspective….
On the Reverse Mortgage, do you have it in writing that the RM will allow for the house to stay in her name / control till 3/23 (8 months from now) completely and without any other requirements?

I ask as RM have required compliance - beyond the elder living there or up to 1 yr after moving out - to keep the RM in place. All in her mortgage contract. Read & reread the mortgage. Compliance would mean that mom is 100% current on her property taxes, current on all required insurances (homeowners, plus flood & windstorm if required for where she is), property is being maintained (yard cut, no visible issues with roof or other visible structural issues like fireplace or foundation cracking). If there’s anything amiss, the RM can call in the loan. RM Usually send out a letter and want whatever issues resolved in 30 days or RM send out another letter that RM is “called in” so foreclosure done.

As your mom is now on LTC Medicaid, she should be paying almost all her monthly income to the NH as the required by Medicaid copay. So your mom has no-none-nada of her $ to pay anything on or do for her old home with the RM. Is your brother who has been living there for years, picking up the slack and paying all property costs including taxes & utilities? If he is not, then are you from your own wallet paying her taxes, insurance and whatever else property costs?

If you find that in fact taxes are in arrears and insurance isn’t current, go thru all moms mail to see if the RM is aware of this and has sent out notices. If mail still going to mom at the house address, you need to be monitoring this unless you know 100&1% brother is doing this and being responsible on telling you & mom and for paying what’s costs mom can no longer can as he’s befitting.

RM are not big on overlooking delinquent property taxes; it’s not to their benefit to cut the old owner or their family or heirs any slack. Acquiring it and selling it asap makes them $.

so all that being said, unless you & your bro are all ok on paying all costs, then I’d suggest that you sell contents of moms house over time use the funds to pay on property costs. Like estate sale LR & DR contents next mo and use that $ to pay insurance thru end of March 2023; then do the BRs and use for taxes. So no sale goes over $1500. Taxes, I’m pretty sure for the entire state, are due at 50% in Nov for Texas, or 100% in Jan unless she placed herself on quarterly payments before she moved out. She may have lost her homestead exemption & if she has, tax bill that comes out in Oct will probably triple. I’d suggest that you check with her caseworker before doing the estate sale ad & getting a permit but I bet as it will be under $2k from any sale, caseworker will be ok.

She is still responsible for taxes and insurance unless her RM has those costs folded into the loan. If it’s folded into, it will be indicated in the mortgage contract. If this is an older RM, it’s probably not included.

On another tangent, is the caseworker aware brother lives there? If he was her FT caregiver from when he moved there in 2017, it’s probably not an issue. But if he works FT and cannot be considered to have been her caregiver all this time, the State may want him paying rent. FMV rent to her as additional “income”. Again, if the State has as its mailing address for mom as her old property, go thru the mail to see if TX DaDs / Medicaid has sent out any letters regarding status on the house as to empty / vacant or occupied.

For estate sales, H‑E‑B sells permits if in a city with heb & require permitting & Goodwill has a item tax deduction form that’s good to use to determine value.

The money over will go towards the skilled facility bill. You won't make enough to pay more than a few months at a home. I was so thankful for all the help mom got and we were glad to give back what little was left.

westwind7: You could do yourself a favor by posing these questions to an elder law attorney. I am unsure why you are letting the reverse mortgage loan default. You will have to do the Medicaid spend down, while keeping diligent records, on such things as a prepaid funeral and other things that qualify.

An elder law attorney would be your best source of information. They’re well versed in the ins and outs of a state’s Medicaid rules. I consulted one when I was concerned my brother might lose his benefits and it was very helpful.