Medicaid rules determine what happens to real estate when someone applies for Medicaid to cover a nursing home stay or long-term care services. Medicaid rules are complicated, so it is wise to consult with an experienced elder law attorney before making real estate decisions.
Q: What happens to my home if my spouse goes into a nursing home and goes on Medicaid?
A: Your home is exempt, which means that you can continue to live in it, and the state cannot make you sell it or put a lien on it. You should try to title the home in your name only, however. You also may want to rearrange your estate so that all of your assets, including your home, will go to your children if you die before your spouse does. Some attorneys recommend arranging for one-third of your estate to go to your spouse.
Q: What if I am single?
A: Normally, your home will be exempt for the first 13 months you receive Medicaid if you are single. However, if your disabled, dependent (under 21), or blind child lives in the home, you will not have to sell it, and it will not be considered a Medicaid “countable resource” if you go into a nursing home. You can also transfer your home to your disabled, dependent or blind child. To be considered “disabled,” your child must meet Social Security disability criteria. If, however, your child also receives public benefits, consult with an attorney before trying to transfer your home, since other rules may apply.
Q: Who else can I give my home to if I am single?
A: You can transfer your home to your sibling if your sibling has verifiable “equity” in the home and has lived there for at least a year before you go into the nursing home. “Equity” means that your sibling has paid taxes, contributed to the home’s upkeep, paid for insurance, or has had an actual ownership interest in the home.
You can also transfer your home to your adult child if your child has lived with you for at least two years before you enter the nursing home and a physician certifies that you would have been living in the nursing home if your child had not lived with you for that two-year period.
Q: Will I have to sell my home if I am single and cannot transfer ownership to anyone?
A: Yes. If you are single and must go into a nursing home, but cannot transfer ownership of your home to anyone, you will have to list your house for sale after you have been on Medicaid for 13 months. You must list the home at the county auditor’s value. Also, you must accept any offer that is at least 90 percent of this value. To list the home at a value other than the county auditor’s appraised value, you must have two written appraisals from bona fide appraisers.
Q: What if my home is included in a revocable living trust?
A: While revocable living trusts are often used in estate planning, they can backfire if you go into a nursing home. If your home is included in a revocable living trust, Medicaid may treat it as a “countable” resource, regardless of who lives there. If you remove it from the trust, Medicaid may penalize this transfer as “improper,” depending on the timing. It is important to consult an elder law attorney about this.
Q: Is there a limit to how much my home can be worth for Medicaid purposes?
A: If you are single and go into a nursing home or seek Medicaid-paid home care, your home will immediately be counted as a Medicaid resource if your equity in the home exceeds $533,000 (for 2013). You can, however, reduce the value of your home by using a reverse mortgage. This rule does not apply if your disabled, dependent, or blind child lives in the home. Also, Medicaid may waive this rule if counting your home as a resource means that you will be deprived of health care, food, clothing, shelter or other necessities.
Q: What if I own my home with someone else?
A: If you are single and in a nursing home, Medicaid will consider that the home belongs only to you unless you can show that the other owner has contributed to the purchase of the home or the home’s upkeep and equity. If this other person does have a verifiable ownership interest in your home, you or your power of attorney agent may have to sell your ownership interest in the home.
This “Law You Can Use” column was provided by the Ohio State Bar Association (OSBA). It was prepared by attorney Janet E. Pecquet of the Cincinnati firm, Beckman Weil Shepardson LLC.