If your elderly loved one will need to go into a nursing home, you might be concerned about what will happen to your loved one’s home. Older adults who qualify for Medicaid to pay for their nursing home care may have claims filed against their estates and homes after they die. The professionals at Elder Care Direction can explain some steps that you might be able to take to protect your loved one’s home.
Medicaid estate recovery
If your loved one receives help from Medicaid to pay for his or her nursing home care, the state is required to try to recover from his or her estate the benefits that it paid for the care. This is called the Medicaid estate recovery. In many cases, the only property of value that elderly adults who qualify for Medicaid are their homes. Before your loved one goes into a nursing home, it is a good idea to talk to an elder law attorney or to do so as soon as possible. Your loved one’s home will not be counted for eligibility purposes if the equity is lower than $585,000. Your loved one will also be able to keep his or her home without an equity limit if his or her spouse or another dependent relative lives in the home.
Transferring a home
If an older adult transfers a home to his or her children, it may result in a Medicaid penalty period. This would make the elderly person ineligible for Medicaid for the number of months that the home would have paid for the care. There are some situations in which transferring a home is legal. Just make certain to talk to a lawyer first. Homes may be transferred to the following people without incurring transfer penalties:
- A spouse
- A child younger than age 21
- A child of any age who is disabled or blind
- A trust for the benefit of a disabled person under the age of 65
- A sibling who has resided in the home during the 12 months before the need for nursing home care and who holds an equity interest in the home
- A caretaker child
Medicaid is allowed to place liens on homes for the amount that the state spends for care. If the property is sold while the people are still alive, they will have to pay back the state to satisfy the liens. There are exceptions to the ability of Medicaid to place a lien on a home such as when a spouse, a blind or disabled child, a child younger than age 21, or a sibling who has an equity interest are living in the home.
The state will not be allowed to file a claim against your loved one’s home as long as one of the previously listed family members resides in the home. However, if the relative or spouse moves out or dies, the state may then attempt to collect.
However, there are some situations in which the value of the home can be protected. The state is unable to recover against the home if the home was owned by your loved one and his or her spouse as tenants by the entireties or if the spouse owns the home. The state also cannot recover from the home if it is in an irrevocable trust.
It is also possible to protect a home by qualifying for an undue hardship waiver. To learn about this possibility as well as other ways to protect your loved one’s home, schedule a consultation with Elder Care Direction today by filling out our online contact form.