Mom's cancer treatment could cost family home

Q: My mom was diagnosed with breast cancer in September 2006 and after treatment was given a clean bill of health. Six days ago, she fell and was brought to the emergency room where they informed the family that her cancer had spread to her brain. For about a month she had been suffering from headaches, dizziness and had problems speaking, but had kept this from the family.

We come from a very modest background, so our income and insurance is limited and we may have to ask for government assistance. My brother and I live at home with our parents, and my older sister has a home of her own. We know we would get Medicaid, but it would bill us at the end of my mother's treatment, and we know we would not be able to afford it. We also understand that if that were the case, they could take our home as payment.

If my parents signed a quitclaim deed releasing the property to my sister, would that mean it was 100 percent her property and the creditors would not be able to take that from her as a result of my parents' debt?

If you could offer some advice, it would be greatly appreciated.

A: I'm so sorry about your mother's condition. Unfortunately, she's sick now, and you can't have her transfer the house into your sister's name. It's too late. Medicaid has a 5-year lookback window, where they'd be able to have a judge unwind the transfer to get the house.

But if your father is living, then the creditors may only put a lien against the house. If they hold the house as tenants in the entirety, he may be able to protect the house from creditors until he sells it or dies. Upon his death, if you didn't get reimbursement from the government, the house would be sold to pay these bills. At that time, you and your brother would have to find another place to live.

You need to look into the medical insurance your mother has, and what it covers in terms of hospital care, doctor's care, prescriptions and hospice care, if required. I'd try to figure out what coverage you do have and what it will cover as soon as possible. Later, you can figure out how to pay for it.

Best of luck to you, your siblings and your parents at this difficult time.

Q: I have a signed contract from earlier this month and now my husband has died and I have not closed on real estate. Is the contract still good?

A: I'm so sorry for your loss. Unfortunately, unless the contract states that in case of the death of either the seller or one of the buyers the contract could or would be terminated, the contract will remain valid.

If you have hired an estate attorney to assist you with your husband's estate, you might want to have the attorney look at the contract with you to determine your options. If you still want to close on the purchase, you should be able to. If you don't want to purchase the property now and the contract is still valid, you might have to negotiate a settlement with the sellers.

They might be willing to accept some money in exchange for releasing you from the contract.

If you used a broker to assist you in the purchase of the home, you can ask him whether he knows of anybody who would want to buy the property and close on your contract. You might be able to assign the contract to that buyer, get your money back, and that new buyer would close on the home.

If you did not hire an estate attorney or don't need one, you should talk to a real estate attorney for additional help.

To get even more valuable advice from Ilyce, visit her Personal Finance and Real Estate Center.

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