Do It Yourself Planning / Elder Abuse
From the Wills, Trusts & Estate's Professor's Blog, an example of a failed estate plan and what appears to be elder abuse. In the article the professor cited, (The Medicaid Trap, Est. Analyst (Nov. 2007)) author Robert L. Moshman describes a very unfortunate situation.
I copied the following excerpt of the article from the Blog because it tells the story well. There is more on the professor's blog.
Mom, a widow, age 72, with a net worth of $500,000 owns a home worth $400,000. She has four children.
Five years ago Daughter and Son-in-Law lost their home and declared bankruptcy and ended up moving in with Mom.***
Then, one day, Daughter and Son-in-Law informed Mom that they want to buy her house[.]*** They tell her that by selling assets now, she'll qualify for Medicaid in the future. And they'll provide her with a life estate...***
Son-in-Law priced the house at $300,000, had Mom provide a "gift of equity" worth $150,000, got a mortgage for the remaining $150,000 which he had Mom sign over in return for the life estate.***
Without offering up one dime of his own money, Son-In-Law ended up with a house worth $400,000 and $150,000 cash. Meanwhile, Mom was left with a life estate. But from that day on, Mom was excluded from the household, subjected to verbal abuse, and ended up staying in her room, which was crammed with possessions that Son-In-Law threatened to throw out. The tension landed Mom in the hospital.
Mom didn't think she needed an attorney or daughter and son-in-law convinced her not to do it because an attorney could have interferred with what appears to be an abusive transfer. Obviously, with half a million dollars in assets, it is worth the cost of a qualified attorney every time.
