Need advice 🥲 My parents (ages 66 & 60 in CA) need cash. The only asset they have is our home which they gifted me and my brother a while ago. Now that they need $$$, we’re looking at transferring it back to them so they can pull equity out of the home. Any thoughts on reverse mortgage vs. cash out etc? One important detail: dad is on Medicare and mom is on Medicaid so no income

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If they transferred the house as a part of Medicaid planning, transferring it back will blow up eligibility.

You’d also want to document pretty significant changed facts and the purpose for the transfer. Even with that, Medicaid is probably going to retroactively claw back benefits.

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You probably need a qualified counsel to look at the issue. I’m certainly not that, but Medicaid eligibility is based on assets so it seems like it would be an issue.

How much cash do they need? Why don't you do the reverse mortgage yourself and gift them the cash?

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Young people can’t get reverse mortgages.

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Does it make sense to sell the house and buy either an apartment or cheaper house and then give them the proceeds?

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Unfortunately no, we would never want to propose they leave Southern California (they’re very happy here) and also there’s really no such thing as cheaper around here unless we had them move to a class C neighborhood or below

my personal vote is a HELOC! it’s not permanent, it’s quick (5 bus days with figure) and you don’t have to transfer the home or pay closing costs like on a refi. but you would need to pull the funds out versus if you transferred the home back and they applied for a cash out.

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yes you can pull it all at once! but they will charge you interest. like principal said you can pull as much as you want but also repay anytime in larger increments or all at once but you’ll have to make minimum payments monthly

Do you want to continue owning the house when they’re gone?

So… in that case any money you borrow against the house needs to be paid back, out of your pockets

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