If both spouses were Medicaid recipients, the state will try to recover the funds in which it spent for long-term care costs. It is important to mention that not all states run their MERP programs the same way. When spending down assets, it is very important that one does not give away assets (in this case, money from the sale of the home), as it violates Medicaid’s look back rule, and will result in a period of disqualification even after the “excess” assets are gone. However, there is another exception called the caregiver adult child exemption, which allows a Medicaid recipient to transfer their home to a healthy adult child under certain circumstances. .attn-grabber-box.text-green p { color: #0e4e0e !important} Stated differently, the money from the sale of the home will count towards Medicaid’s asset limit. .attn-grabber-box.text-info p { color: #31708f !important }. All 50 states and the District of Columbia have Medicaid Estate Recovery Programs (abbreviated as MERP or MER). Said another way, if a Medicaid applicant dies and still has a living spouse, Medicaid cannot attempt to recover long-term care costs. The benefit of keeping the house is that the Medicaid payment rate is usually substantially less than the private pay rate for nursing homes. Once they exhaust their money and assets, Medicaid kicks in to pay the facility for the care of the patient. In states that only seek Medicaid estate recovery through probate, there are ways for a Medicaid recipient to keep his/her home out of probate. (Please note that it is care services Medicaid pays for in assisted living, not room and board). That said, there are some exceptions in which the state cannot attempt estate recovery, such as if you have a child under 21 years old or have a child that is disabled or blind. This is because the home will no longer be a part of your spouse’s estate upon death. Once you qualify for Medicaid, the program looks back to see if you’ve sold, given away, or gotten rid of during the previous five years. The benefit of keeping the house is that the Medicaid payment rate is usually substantially less than the private pay rate for nursing homes. These agents work on a low flat-fee commission or 1% if the home sells over $350,000, so you can maximize your profit. A: There are a variety of factors that can affect your situation, but in the simplest of terms, Medicaid wants to know that an individual has used all of his or her available assets before using government funds to pay for the care and wellbeing of a person. More often than not, this extra cash will put a Medicaid recipient over the asset limit, which is cause for Medicaid disqualification. Transferring the home to solely your name will also protect your home from Medicaid making an estate recovery claim (a claim to be paid back for the cost of your spouse’s nursing home care). That said, you need to balance this against the cost and trouble of maintaining the house. It’s also important to note, upon your death, the state is able to file a claim against your estate, which includes your home, in order to collect funds for repayment of your nursing home care expenses. More. It simply means that when your house is sold, the state will receive money from the sale for reimbursement of the cost of your Medicaid-funded care. If you sell your house and immediately purchase a new one which is your principal residence you are converting one exempt asset for another. When a Medicaid beneficiary dies, the state has a right to recover from his or her estate whatever it has paid out under the Medicaid program on that person’s behalf after she was 55 years old or at any age for nursing home care. If you sell your mom’s house, you are basically taking an exempt asset and turning it into a countable asset. Use of this content by websites or commercial organizations without written permission is prohibited. Partnership Programs are a collaboration between a private insurance company that sells long term care partnership policies and a state’s Medicaid program. Therefore, this strategy needs to be implemented well before it’s thought one might require Medicaid assistance. Here’s what you should know. (In an oversimplified explanation, there is a “trustee” who manages the trust, and the person who created the trust no longer is considered to be the owner of the assets. This rule allows a parent to transfer his/her home to his/her adult child under the following circumstances without violating the look back period. If the value of the home is substantially higher than the mortgage, we’d suggest you talk to an elder care practice attorney in your area. However, if the home is sold while you are still alive, the proceeds from the sale will disqualify you from Medicaid until you have “spent down” the proceeds on your nursing home care. In this situation, the proceeds from the sale of the home would be used towards paying the cost of nursing home care until the proceeds were “spent down” to the eligible Medicaid asset limit. For additional information about MERP, click here. Can Medicaid Take My Home? This may include life estates, property that is jointly owned, and so forth. This means you cannot donate your home or sell it for less than its value to avoid giving the proceeds to Medicaid. This includes selling your home. Therefore, once your home is sold, the state will likely collect all or some of the proceeds from the sale as reimbursement. Incorrectly transferring ones’ home can result in Medicaid ineligibility. This is because once your home has been sold, it is no longer an exempt (non-countable) asset. Some states’ Medicaid estate recovery programs attempt to recover long-term care costs after the death of a surviving spouse. This includes one’s primary home, given the applicant (or his / her spouse) lives in the home, or the applicant expresses an “intent” to return to the home in the future. Is there a time limit to waiting on reinvesting in.property that could effect this situation as well please? Cloudflare Ray ID: 5f0de932cab8e10a If the state believes that your stay in a nursing home will be a permanent arrangement, the state can file a lien against your home. It only applies when he/she passes away and is unmarried. For more on Medicaid planning, click here. Essentially, an “intent to return home” statement protects your home from Medicaid while you reside in a nursing home facility. The Medicaid rate for a care facility is lower than the private pay rate, so you’re technically saving money for each month you stay on the Medicaid system. Best “we buy houses for cash” companies, Are you a top realtor? Essentially, the same dollar amount that a long term care insurance policy pays out for the policyholder’s long term care is “protected” from Medicaid’s asset limit and from estate recovery. If you are able to move back into your home, the lien against it will be removed. }; Will Selling My Mom’s House Affect Her Medicaid? You may need to download version 2.0 now from the Chrome Web Store. Use of this content by websites or commercial organizations without written permission is prohibited. For state specific equity value limits, click here. First, the adult child must have lived with his/her parent at least two years prior to the parent moving to a nursing home or assisted living facility paid for by Medicaid. The fear is that if they sell their home, then they wont be eligible for medicaid in Florida, because they'll have much more by way of liquid assets (cash well over the $2,000.00 limit). If you are on a personal connection, like at home, you can run an anti-virus scan on your device to make sure it is not infected with malware. Many times it makes the most sense to hold onto a house while you are on Medicaid pay at a care facility. Without an “intent to return home” statement, your home would make you ineligible for Medicaid. Copyright © 2020 All rights reserved. If the non-Medicaid spouse died prior to the Medicaid recipient spouse, the state will try to recover the funds it spent for long-term care. With a lady bird deed, a Medicaid recipient only has ownership of his/her home while he/she is alive (he/she is referred to as life tenant), and upon his/her death, home ownership is transferred to another person, often the deceased’s child (referred to as the remainderman). If only one spouse was a Medicaid recipient and passed away prior to the death of the non-Medicaid spouse, the state may or may not attempt to recover the costs for care. Different Scenarios Explained, Single and grown children live in the home, Married and one spouse moving to a nursing home, Married and one spouse in nursing home passed away, Married and one spouse living at home passed away, Both spouses have passed, grown children live in home. The benefit of keeping the house is that the Medicaid payment rate is usually substantially less than the private pay rate for nursing homes. In A... My wife and I would like to sell our large single-family home and move into a rental community. As of 2020, one’s home equity value must be under $595,000 or $893,000, depending on the state in which one resides. If you have moved to Medicaid pay in your long-term care facility — or you will be doing so soon — Medicaid will pay 100% of your nursing home costs at a Medicaid-approved care facility. As long as you live in your home, and the equity value (what your home is worth minus the amount that is owed) is under a specified limit, Medicaid cannot take it. An attorney can help find the best solution for you and your family. However, if the couple has a disabled, blind, or minor (under 21 years of age) child, the state cannot attempt estate recovery. Of course, if you live a long time and your home isn’t worth much, it may make more sense to sell it now. But as soon as you sell that home and move out, Medicaid will consider as an asset any money you getsfrom the sale. For instance, in some states, such as Florida, if the Medicaid recipient passes away, leaving a surviving spouse, the state will try to recover long-term care costs after the surviving spouse dies. Long Term Care Partnership Programs help protect all, or a portion, of a Medicaid applicant’s assets from Medicaid’s asset limit, as well as from Medicaid estate recovery. As the spouse of the Medicaid applicant, the home can be transferred to you without violating Medicaid’s look back period. relatedSites.onchange = function() { If you want to stay under the Medicaid pay system, you may decide to let your heirs sell your home after you pass away.