Will Medicaid take my house if I can’t afford to pay for a nursing home?
Home ownership is the American Dream. People work hard all their lives to own a home, and it is often their most valuable and significant possession. So, when your health begins to fail and the need for long-term care arises, we often get this fear-filled question from our clients: will Medicaid take my house to help pay for my nursing home care?
FAQ: Will Medicaid Take My House?
The enormous and on-going costs of nursing-home care are astronomical, on average around $8,500.00 a month depending on location. The joint federal and state Medicaid program foots the bill for one in four Americans, or around 75 million recipients. This represent a substantial portion of the federal budget each year. To recoup some of those costs, Congress under the Medicaid statute permit states to take the value of a recipient’s home, in some cases, to reimburse the program for funds the State Medicaid agency has expended on the recipient’s behalf.
Yet, because a home is such an essential family possession, the rules treat a primary residence as exempt – that is, its value is not counted as an available resource to pay for nursing-home care for the home-owner, before Medicaid kicks in. The home is protected, to a certain extent, for the benefit of Medicaid recipients and their close relatives.
That protection can be lost, however. The value of the house can be counted against a Medicaid applicant, and benefits denied or curtailed, when:
- A home-owner has no living spouse or dependents; and
- The owner moves into a facility permanently, with no intent to return home; OR
- The owner dies.
In other words, In Maryland, as long as the homeowner expresses the intent to return home, the home will not be counted against the owner for Medicaid-eligibility purposes.
Once the owner passes, however the state may place a lien on the home, to secure reimbursement of the value of the Medicaid services the owner received. This lien makes it impossible to sell the home or refinance a mortgage, without first paying the state what it may be owed.
As an elder law firm, at McDonald Law Firm, we know a number of ways to protect your home from Medicaid liens. If you proactively plan for your long-term care, we can preserve your home or its value such that Medicaid will not count it or place lien against it. One technique that’s available to us is moving a child into the home and have the child care for an ailing parent for two years, permitting the parent to stay home and out of a nursing home, the house can then be given as a gift to that child without any Medicaid penalty or disqualification. Ordinarily, Medicaid heavily penalizes giving away property, but this is one exception.
There are other strategies available. The home can be given to a disabled child without penalty or disqualification. Or, you might keep the right to live in the house for your lifetime and deed the remainder interest to others, who will then own the house after you pass. However, each strategy comes with risks that must be fully explored before determining the correct one.
An overall plan that is tailored to suit each individual, and to meet as many contingencies as possible, requires juggling a number of puzzle-pieces. There is no one cookie-cutter solution. The key is to plan before you or your spouse may need nursing-home care.
We are here to help.
As one piece in the overall picture of a balanced estate plan, at McDonald Law Firm, we can help you save your home. We welcome the opportunity to work with you.
Give Andre O. McDonald, a knowledgeable Howard County, Montgomery County and District of Columbia estate planning, special-needs planning, veterans pension planning and Medicaid/long-term care planning attorney a call today at (443) 741-1088 or (301) 941-7809, to schedule a consultation.
DISCLAIMER: THE INFORMATION POSTED ON THIS BLOG IS INTENDED FOR EDUCATIONAL PURPOSES ONLY AND IS NOT INTENDED TO CONVEY LEGAL OR TAX ADVICE.