Saved By The Stroke Of A Pen

Gail moved her mother in with her six years ago. Gail placed her mom on her mortgage, and her mom is now in a nursing home and receiving Medicaid. Will her mom's credit cards come after her?

QUESTION: Gail in South Carolina moved her mother in with her six years ago. They used the proceeds from the sale of her mom’s home to create a mother-in-law suite on their home. Gail placed her mom on her mortgage, and her mom is now in a nursing home and receiving Medicaid. Dave says Gail is safe as long as her name isn’t on the deed.

ANSWER: Your house is not in her name. It’s in your name. The deed is the ownership instrument. The asset is owned by you and your husband. The liability, which nobody wants—the mortgage, has her name on it, too. The credit card companies aren’t going to get paid.

You guys should have stepped in and kept her from running up this $40,000 in credit card debt. Effectively, what she’s done is stolen $40,000. She borrowed money knowing she didn’t have the money to repay it. It was long ago out of control. The credit card companies are stupid for loaning her the money, and they’re going to get bitten for that reason because she’s going to die with no assets. In the meantime, she’s going to live with no assets. They shouldn’t have loaned her the money, and she certainly shouldn’t have been borrowing the money.

As far as your home goes, it’ll be safe.

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