Protecting Your Home

One of the most common requests we receive from clients and their families when they are accepting a monetary settlement is, “Can we buy a home?” While in the majority of cases, the answer is “Yes”, the means by which a home can be purchased or built can vary greatly - with equally great variations in how the home can be titled, used, and ultimately passed on to family members.

There are numerous factors to be considered when purchasing or building a home using monies received from a settlement. Here are just a few: The age of the injured person - if the plaintiff is a minor, the court will oversee the entire process. If a Trust is involved, then a Trustee will also be involved to oversee the process. Usually the family of the minor plaintiff wants to live in the home with the minor plaintiff. How will that work and who pays for their share of ongoing costs to maintain and improve the home? If a Special Needs Trust is utilized, then most states have a payback provision to the State for all Medicaid expenditures paid out on behalf of the injured trust beneficiary, so how can the family avoid having the home sold out from under them if the injured person dies? What if the family contributes significant money to the upkeep of the home? Will they get credit for that?

If the injured person is not a minor, does this person have legal capacity to make decisions about purchasing a home? Should the person take title to the home in his or her own individual name? If a Special Needs Trust is funded immediately following settlement, has the opportunity to avoid the State lien against the home been lost forever? There are ways to take title to the home to avoid the State lien but these techniques must be implemented before the Special Needs Trust is funded after settlement.

Purchasing a home, especially one that may require significant and expensive modifications to accommodate a disabled client, is an extremely important decision that should be investigated far in advance of accepting a monetary settlement. Planning ahead allows the injured person and his or her family the ability to investigate the options and understand how to best design the ownership, use and ultimate disposition of the home in the future.