My father is a veteran with dimentia. My parents owe 60k on their loan as of now. I want to pay it off for them because if my mother makes the difficult decision to put my father in a VA home she will lose the house since you cannot have both. Is there any problems I will face if I pay the loan off outright? Legal things? Thanks in advance.
Paying parents VA mortgage loan off.
byu/RoyalCPT inpersonalfinance
Posted by RoyalCPT
6 Comments
You’re allowed to gift each parent $19,000 without needing to report it. If you’re married, your spouse can also gift them $19,000 each which is more than you need to pay off the loan.
If you’re not married, you need to file a gift tax return reporting the gift exceeding $19,000 each, but there’s no tax due or anything like that, it’s just an information return.
Sounds like time to talk to a lawyer that specializes in elder care situations.
Dad fell apart first, needed long term care and Medicaid was possible. We were concerned about Mom losing her car and their home but of course the laws/rules say that doesn’t have to happen for Dad to qualify for Medicaid. Because, of course, on half of the married couple is still able to live on their own so they should.
Parents spent $5,000 on the lawyer for advice and drafting of documents to get Mom and Dad’s situation ready to meet their individual needs. That was money well-spent for sure.
You are drastically misunderstanding the situation with Medicaid and assisted living. Talk to an attorney who specializes in elder care issues before you do anything.
You can’t have both what? A VA loan and put him in a VA facility?
you need to think this through. initially your plan sound kind and generous but it is not clear to me if it a sincerely good idea, it gets increasingly expensive to care for someone with dementia, plus it is emotionally hard for a spouse to care for their partner with dementia. private care over his lifetime may be far more costly than the value of your parents home, meaning that parting with it may not be a bad idea, at least economically speaking. the va care may be more economical and allows you and your mom to have the freedom to be with him whenever you want without giving up your lives. you are in a tough spot, but have to think long term before making an expensive mistake that may become more expensive without good planning.
ps. one thought is for you to buy their house and rent it back to your mom. however, entitlement programs like the Va, snap, etc have look back periods, as much as five years (vary by state) so it may not be possible.
It’s good that you are trying to help but this is a complicated topic and you’re not going to find the answer on Reddit or by thinking it through with your own common sense. You’re going to need an actual lawyer. The specialty is called elder law