If you are attempting to qualify for Medicaid to pay for your long-term care needs, you likely have a number of questions about the assets that you hold jointly with your spouse or children. The professionals at Elder Care Direction can help you to determine how different jointly held assets might impact your eligibility for Medicaid. The manner in which your assets are titled may affect your family’s finances when you apply for Medicaid as well as after you die if you were covered by Medicaid.
Jointly held assets and qualifying for Medicaid
When unmarried people apply for Medicaid, the states in which they live add the value of all of their assets, including 100 percent of joint bank accounts in which they have interests. If the other account holder is able to prove his or her contributions to the account, that amount will be protected.
If all of the money in your account came from you, adding the name of your child to your account will not prevent Medicaid from counting the money held in the account. Medicaid will count the entire balance as a part of your total assets. If your bank account is titled in either your name or your child’s name, this is the rule that will apply. If the title of your account names both you and your child and both of you must sign to withdraw money to the account, Medicaid will instead consider the balance to be a gift from you to your child. Adding a transfer on death or payable on death designation to your account will not affect how the account is viewed by Medicaid, however.
Joint ownership of real estate
If you add your child’s name to your deed, Medicaid treats it as if you gifted half of the value of the real estate to your child. If you add two children’s names, Medicaid will view it as a gift of two-thirds of the value of the real estate. This type of gift may cause you to be disqualified from Medicaid for a substantial period if you apply for Medicaid within five years of signing your new deed.
There are three different forms of joint ownership for real estate, including the following types:
- Tenancy by the entirety – Joint ownership between spouses that includes more protection for assets
- Joint owners with the right of survivorship – When one owner dies, the other owner receives his or her interest in the property
- Tenants in common – When one owner dies, his or her interest in the real estate will pass to his or her heirs or beneficiaries rather than to the other owner
Rules for spouses
If you are married, the state will add up all of both your assets and those of your spouse regardless of whether your assets are all titled in the name of your spouse. It is still a good idea for you to transfer all of your assets into the name of your healthy spouse because it can help with Medicaid planning if you become incapacitated.
If you apply for and receive Medicaid and die, the way in which your assets are titled will also matter. The state is able to try to get reimbursed for the total amount of Medicaid benefits that it paid for your care. Some states limit their recoupment efforts to probate assets, which are those assets that are solely in your own name. This would mean that jointly held accounts would not be covered by these claims. Other states still will still claim an interest in assets that are not probate assets.
The way in which your assets are titled can have a huge impact on your eligibility for Medicaid as well as on the state’s ability to try to get reimbursed for your care from the assets that you have left behind after you die. To learn more about how you might want to title your assets to plan for Medicaid, contact Elder Care Direction today to schedule your consultation.