Can I purchase my parents home if they have outstanding medical bills?
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Can I purchase my parents home if they have outstanding medical bills?
I want to purchase my family home. However, I am concerned about my father’s outstanding
hospice care bills. If I purchase the home, can the medical provider attempt to seize the property from me in the future? Who sets the price if this process is legal?
Asked on March 26, 2019 under Real Estate Law, Virginia
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
You can buy it for fair market value--what it is worth, or what a 3rd party, unrelated to your parents would pay for it. That can be determined by having a realtor evalute and price it for you, by comparing it to local comps, and/or by an appraisal. As long as you can show you bought for fair market value, the transaction will be valid and the state or a medical care provider cannot take the house (you'll want to keep the documentation showing the value, in case you need it later).
Note that doesn't mean you have to pay the highest possible price. There is no one set value for a home; a house is reasonably worth a range of values. As long as you in the fair range, you are ok. Example: we sold a house for $490,000. Similar houses on our street at that time were going for $460,000 to $510,000; anywhere in that documentable range would be fair value.
If you buy the home for less than fair value, this could be taken as a transaction done to hide assets from creditors and defraud them; in that case, a creditor could reasonably attempt to set the transaction aside or void it and get the house. But when it's a fair market value, there is no fraud: your parents will have swapped their house for an equivalent amount of money and are coming out even in terms of assets/wealth.
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