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Protect Your House When You Want to Qualify for Medicaid
Jan 26, 2024
You generally do not have to sell your home to qualify for Medicaid for nursing home coverage. However, it is possible for the state to file a lien against your home after you die. So, you may want to take steps to protect your house.
If you get help from Medicaid to pay for the nursing home, the state must pursue estate recovery. This is an attempt to recoup from your estate whatever benefits it paid for your care. The only property of substantial value that a Medicaid recipient is likely to own at death is their home. If at all possible, consult with our elder law attorneys before you enter a nursing home (or immediately afterward) to discuss ways to protect your home.
In New York State, Medicaid will not count your house as an asset when you are applying for Medicaid if the equity of the home is under $1,071,000 in 2024. Also in New York State, you may keep your house with no equity limit if your spouse or another dependent relative lives there.
Transferring a Home to Your Children
In New York State, transferring your house to your children, any other person (except your spouse), or irrevocable trust, will result in a penalty (or waiting) period for institutional (nursing home) Medicaid, if the application for institutional Medicaid is made within 5 years (lookback period) of the transfer. The length of the penalty period depends upon the value of the house that is transferred.
Depending on your circumstances, it can be legal to transfer a house, however. Consult an attorney before making any transfers. You may freely transfer your home to the following without incurring a transfer penalty:
- Your spouse
- A child who is under age 21 or who is blind or disabled
- A trust for the sole benefit of a disabled individual under age 65 (even if the trust is for the benefit of the Medicaid applicant, under certain circumstances)
- A sibling who has lived in the home during the year preceding the applicant’s move to a nursing home and who already holds an equity interest in the home
- A caretaker child of the applicant who lived in the house for at least two years prior to when the applicant moved into a nursing home and who, during that period, provided care that allowed the applicant to avoid a nursing home stay
Medicaid Liens for Estate Recovery
Except in some of the limited circumstances listed above, Medicaid may put a lien on your house for the amount of money spent on your care. If the property is sold while you are still living, you would have to satisfy the lien by paying back the state. The exceptions to this rule are cases where a spouse, a disabled or blind child, a child under age 21, or a sibling with an equity interest in the house is living there. In this situation, the state cannot file a lien for reimbursement of Medicaid nursing home expenses. However, once your spouse or dependent relative dies or moves out, the state can try to collect. Again, this is known as estate recovery.
Work With an Elder Law Attorney
To learn more about your options, talk to the elder law attorneys at Kommer Bave & Ciccone LLP.