An aging parent who does not have any other assets and believes she would end up on Medicaid sooner rather than later, may not know what would happen to the house that is in both her name and the name of her son. Medicaid rules regarding a home vary by state and by each scenario, according to Beck & Lenox Estate Planning & Elder Law, LLC.
Nj.com’s recent article entitled “What happens to my house if I go into a nursing home?” says that timing is everything, and the answer may depend on when and how the son obtained his interest in the parent’s house.
If the parent owned the house and put her son’s name on the deed along with hers, the parent made a gift of an interest in the house to her son.
Medicaid has a five-year look back period when a senior applies for Medicaid.
If an applicant made any gifts during this look back period, a penalty period will apply. During that time, an applicant isn’t eligible for Medicaid. However, if the gift was made prior to the five-year period, the penalty period is inapplicable.
If the son bought the interest in the parent’s house, the Medicaid lookback rules don’t apply.
However, in any event, Medicaid requires an applicant to “spend down” her assets to $2,000 (in most states, but the amount may vary) to qualify for the program. *Note: In Missouri, the spend down amount for a single person is $5,035.
A home the parent or a spouse or disabled child are living in will be considered exempt. However, it won’t be exempt if the parent, spouse, or disabled child, aren’t living in it and have no expectation of returning to it.
If the parent will not be living in or returning to her home, the parent will need to sell her interest in the home before she qualifies for Medicaid.
Alternatively, the parent and her son will have to sell the home, and she will have to use her share of the proceeds before she can qualify for Medicaid
If the parent meets the spend down requirement and qualifies for Medicaid, the state may very likely put a lien on the home and recoup the government’s payout for her stay in a skilled nursing facility once she has passed away. However, prior to her move into a skilled facility, if the son had been living with mom in the shared home, providing a level of care for her for a period of at least two years that kept her out of the nursing home, the son may be able to keep the parent’s share of the home.
This exception has a complex set of rules and may vary by state. Missouri is one state where the Medicaid rules regarding a home allows this exception.
Medicaid is complicated and the above information is only general in nature. Medicaid rules sometimes change and can even be applied differently based on where you live. You should consult with an elder law attorney like the ones at Beck & Lenox to make certain you take the steps that will be most beneficial to your specific set of circumstances.
Reference: nj.com (June 4, 2021) “What happens to my house if I go into a nursing home?”