Individuals who receive Medicaid to pay for nursing home care, assisted living or in-home care must meet stringent financial requirements. The non-excluded or inaccessible resources cannot exceed $2,000 at the time of application, and as of the first day of each successive calendar month, must be below that limit in order to maintain eligibility. What resources are “excluded” or “inaccessible?” The most common example is that the primary residence is excluded if the Medicaid recipient lives in it, and if it’s on the market, it’s inaccessible. Real estate that’s jointly-owned with other people who are unwilling to sell is treated as inaccessible. But there’s a catch.
Although Medicaid benefits can be provided despite the fact that the individual owns these excluded or inaccessible resources, there is generally a Medicaid estate recovery lien against the Medicaid recipient’s estate at death for services provided after age 55. This means that the estate’s administrator/executor will need to settle up on the Medicaid lien before distributing any remainder to the heirs. There are a few exceptions; the collection on the lien is deferred if the individual is survived by a spouse, disabled child, or child under age 21.
During the lifetime of the individual, there might be opportunities for a Medicaid applicant or recipient to transfer title to the primary residence to certain people without jeopardizing eligibility. There are many specific rules to be aware of, of course. Possible transfers of this sort include a spouse; a sibling with an equity interest; a disabled child; a child under 21; and a child who meets the criteria to be considered a “caregiver child.”
There might be legal impediments that delay or even prevent an individual from making such transfers. Perhaps s/he lacks legal capacity but never signed a power of attorney, and guardianship is needed. Perhaps there was a pre-existing encumbrance or obligation that limited the individual’s freedom to make a gift of assets. Or perhaps the individual just didn’t know the rules. Whatever it is, if the property is still owned at time of death, it could be available for payback of a State lien.
Timing is everything, and forewarned is forearmed. For advice concerning asset protection in connection with Medicaid eligibility, call us for an appointment ………… 732-382-6070