If you or your loved one needs to go into a nursing home, your home may or may not be a “countable” resource, depending on a number of factors.
First, if you are single, then the home may be exempt if you can articulate an intent to return home or have the home listed for sale in a way that your Medicaid agency recognizes. Be sure to know what the rules are about this, as some people will list the home on Facebook or Craigslist and not with a realtor and, generally, the Medicaid agency will not recognize this as a serious attempt to sell the home.
If you are married and your spouse lives in the home, it will not be a countable asset, generally. Likewise, if you have a “dependent family member” living in the home, the home will continue to be noncountable. Your Medicaid agency may still place a lien on the home in these circumstances regardless of your marital status.
The equity in the home must be valued at below $585,000, or below $878,00o in a higher value state, for the status to remain noncountable.
So, how to protect one of your largest investments?
- You can transfer the home to your spouse if you are married and if the spouse lives in the home. This transfer is not one that will lead to a penalty. If your spouse leaves the home for their own care, or if it is sold, then 1/2 of the proceeds would still have to be spent on your care.
- You can transfer the home to a disabled child, whether or not the disabled child lives in the home, and the transfer is not penalized.
- You can transfer the home to a sibling who has lived in the home for more than 1 year and has an equity interest in the home. If the sibling does not have an equity interest, sell them a small amount of equity and gift the rest.
- You can transfer the home to a child who lives with you for more than two years if your doctor certifies that the child’s care kept you out of a nursing home for that time. This will be a heavily fact-specific inquiry, so the child must provide extensive proof of residence. If the child owns their own home, they need to give up their homestead interest, change their driver’s license, voting record, mail, etc.
- You can sell the home, but then the asset is countable.
- You can transfer to other third parties and wait for 5 years.
- You can plan a transfer, depending on value, and pay the private pay during the penalty period. None of these avenues should be undertaken without an attorney who is knowledgeable in this area.
