By Donald L. Kingett, Esq.
The fear of losing their home to Medicaid may have contributed to a case of elder abuse in California. The granddaughter was sentenced to prison for elder abuse when her grandmother was discovered to have been neglected with bedsores and open wounds in the home they lived in. Her grandmother passed away after being discovered by authorities. Allegedly the granddaughter feared that Medicaid would take their house if she applied for Medicaid for her grandmother.
It is commonly misunderstood that Medicaid will take a person's house if they are receiving Medicaid. The truth is that Medicaid recipients do not automatically have to sell their homes in order to qualify for Medicaid in many states. Many state provide that a house will not be considered a "countable" asset in order to qualify for Medicaid where the nursing home resident has an intention to return to the home. Typically, the nursing home resident must prove a likelihood of returning home. The state can place a lien on the home, meaning that if the home is sold, the amount of the lien would have to get paid back to the state. Additionally, when a Medicaid recipient dies, the state may attempt to recover Medicaid payments from that person's estate. In that situation the house would probably be sold in order to pay this liability.
There are a number of things that can be done to protect the home. For example, a Medicaid applicant can transfer a home to the following individuals and still qualify for Medicaid:
-The husband or wife of the applicant
-A child under age 21 who is blind or disabled
-A trust for the benefit of a disabled individual under age 65
-A sibling living in the home during the year before the applicant's institutionalization (as long as they already own an ownership interest in the house)
-A child of the applicant who lived in the house for at least two years prior to the applicant being institutionalized If they provided care that allowed the applicant to avoid staying in a nursing home).
Furthermore, with advance planning there are other ways to protect a house. A life estate can allow a Medicaid applicant to continue to live in their house, but allows the property to pass outside of probate to the applicant's beneficiaries. The use of a specially designed trust can also protect a house from Medicaid.
Don't allow your Medicaid concerns prevent you from getting your family members the care they need. Although the thought of possibly losing a home is intimidating, there are things that can be done to protect the home. To find out your best solution, contact us for an appointment.
***Disclaimer: This article does not constitute legal, accounting or other professional advice. Only through a personal, confidential consultation with qualified legal counsel can anyone properly evaluate their own unique Tax or estate planning challenges and determine what, if any, appropriate legal strategies and tactics should be implemented to meet those challenges.”***