In most cases, you will not be required to sell your home so that you can qualify for Medicaid to pay for your nursing home care. However, your state might file a claim against your home to recoup some of the costs that it paid for your care through a process called estate recovery. Before you need nursing home care, it is a good idea for you to consult with the professionals at Elder Care Direction for help with Medicaid planning and protecting your home.
Some states have enacted the Deficit Reduction Act of 2005, which protects homes that have equities of less than $552,000 for the purpose of Medicaid eligibility. All states allow you to keep your home without an equity limit if a dependent relative or your spouse are living in the home.
Transferring the deed
A majority of states will view transferring ownership of your house to your children as a gift. If this transfer is done within five years of when you apply for Medicaid, you will be ineligible to receive benefits for a Medicaid penalty period. There are still some situations in which it will be legal for you to transfer your home. The staff at Elder Care Direction can refer you to one of our partner attorneys for advice about transferring your home legally. You may be able to transfer your home to the following people without incurring a penalty:
- Child who is younger than 21 or who is disabled or blind
- Trust for the benefit of someone who is younger than 65 and disabled
- Sibling who lived in the house for the year before the applicant’s placement in a nursing home who has an equity interest in the home
- Caretaker child who lived in the home for a minimum of two years
Placing a lien on your home
Medicaid may be able to place a lien on your home for the money that it spent on your health care. If your property is sold while you are still alive, you would have to pay back the state to satisfy the lien. If your spouse, a child who is disabled, blind or under the age of 21 or a sibling who has an equity interest is living in your home, the rule will not apply.
The state can’t file a claim against your home for Medicaid if your disabled or blind child, spouse, a child under age 21 or a sibling with an equity interest lives in your house. However, once the relative moves out or passes away, the state may then be able to collect. The state will not be able to recover if the home is only in your spouse’s name and you have given up your interest. It also cannot recover if your home is held by an irrevocable trust.
Protecting your home from the state so that you can qualify for Medicaid while still keeping the home in your family may be possible. To learn more about the options that you might have, contact Elder Care Direction today.