Protecting the house from Medicaid
Care in a nursing home is expensive. For an extended stay, most people will need to pay quite a bit out of their own pocket. If there are no savings, Medicaid—the joint state-federal health insurance for low-income individuals—will step in.
But it's not a free ride. Medicaid allows recipients living in nursing homes to own a house and keep it, as long as they sign a document saying they intend to return. Upon their death, things change. The state is obligated to taxpayers to seek reimbursement from the Medicaid recipient's estate.
There are exemptions to protect heirs and the home. Medicaid varies by state. As a rule, the government cannot interrupt inheritance and recover costs in the following situations:
If there is a surviving spouse, no matter where they live
If there is a child caregiver—meaning a daughter or son—who can demonstrate they provided care that delayed institutionalization. They can inherit the house if they are living in it at the time of death, and lived in it two years prior to the deceased moving to the nursing home
If there is a surviving child under age 21 or who is blind or disabled. The child does not need to live in the house
If there is a sibling who is a part owner. They need to be living in the home at the time of death and have lived there at least one year prior to the deceased's moving into the nursing home
If "undue hardship" can be proven. This relates to low-income situations such as a family farm where heirs rely upon the farm for income, and that income is limited
The laws surrounding Medicaid are complex. Work with an experienced attorney in the state where your loved one lives. Planning years ahead is the best course.
Concerned about the family home?
As the North Shore and Chicago experts in family caregiving, we at Options for Aging urge you to seek the counsel of an attorney now or at least five years before you anticipate the need. Medicaid takes a very long view. The house is a primary asset and of course one you wish to protect. To learn more and get a referral to an attorney in our area, give us a call at 847-868-1445.