If your have a loan agreement and a promissory note with a mortgage recorded in the county deed records, your loan will be repaid out of the proceeds of the sale. If your sister then has no more than $2,000,she will continue to qualify for SSI. Since she may have more, she may want to consult with a local elder and special needs lawyer about putting the house (and thus, later, the money from its sale) in a special needs trust. The viability of this approach varies partly by county. She can find a local attorney who specializes in this area through the Special Needs Alliance or by using the Find a Lawyer function on the website of the National Academy of Elder and Special Needs Law Attorneys (www.naela.org).
This is general information. It cannot substitute for a personal consultation with an attorney. It is not intended to be legal advice or imply an attorney-client relationship.
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