Generally, you don’t have to sell your home in order to receive coverage for nursing home care under Medicaid. While it is possible that the state may file a claim on the house after you pass away, you can take steps to protect that and other issues from arising in the future. If you receive assistance from Medicaid to pay for costs of living in a nursing home, the state may try to recoup from the estate whatever benefits are paid for the care. This is referred to as estate recovery, and the only property of value that a recipient may own upon their death is their home.
In most states, if you transfer your home to children or another person, it may cause Medicaid to give you a penalty period, for which you are ineligible for benefits. Keep in mind that it is legal to transfer your house, however, you may want to get advice from a property elder lawyer before doing so. As your lawyer may explain, like a property lawyer families depend on at Silverman Law Office, PLLC, you can transfer your home to those listed below without getting a transfer penalty:
- A child who is under the age of 21
- A child who is disabled or blind
- Your spouse by law
- A sibling who lived in the home the year before the applicant moved into a nursing home facility, and who holds equity interest in the property
- Into a trust for the benefit of a disabled person under 65 years of age
- A child who is the caretaker of the applicant (meaning the applicant was homed in that caretaker’s house for a couple years before moving them to a nursing home facility, and who during this time provided care that allowed an applicant to avoid staying in a nursing home)
There are situations when Medicaid may place a lien on your home for the same amount of money that has been spent on your coverage. Let’s say the property is sold while you are still alive, you would have to satisfy this lien through paying back the state. There are exceptions to this, particularly in cases when a spouse, blind child, disabled child, child under 21, or sibling has equity interest in the house while living there.
As your lawyer can review with you, there are times when the value of a house can be safeguarded from Medicaid recovery. For instance, the state cannot recover funds if you and your spouse owned this property as tenants, or if the home is listed under your spouse’s name and you relinquish your interest. The state cannot recover from a property that is in an irrevocable living trust. Furthermore, some relatives or children may protect the house if they qualify under an undue hardship waiver. To put this in a real life scenario, a claim against the house may be avoided after you die if your child took care of you prior to entering a nursing home, and does not have any other permanent residence.