What Happens to My Home If I Go to a Nursing Home?
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.
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 may apply depending on other factors. During the penalty period, 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 a Louisiana applicant to “spend down” her assets to $2,000 to qualify for the program.
A home the parent or a spouse or disabled child are living in will be considered exempt up to approximately $600,000 in value. 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. Also, keep in mind that this does not necessarily mean the house is exempt forever. Medicaid can persue “medicaid estate recovery” under certain circumstances when the parent passes away. In other words, don’t let the promise of your home being “exempt” from Medicaid lull you into a state of complacency. It may be exempt on the “front end” but not exempt on the “back end.”
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.
In addition, if the son is also providing a level of care for the parent for a period of at least two years, the parent has allowed you to stay in her home and not have to relocate to a nursing facility sooner. This exception has a complex set of rules.
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 estate planning or elder law attorney to make certain you take the steps that will be most beneficial to your specific set of circumstances.
Read these articles addressing long term care: What Should Women Know about Long-Term Care? and Understanding Short-Term and Long-Term Disability Insurance
Reference: nj.com (June 4, 2021) “What happens to my house if I go into a nursing home?”