Can Someone Transfer Property Prior to Entering Nursing Home and Still Get Full Medicaid Coverage?
There are three circumstances in which persons who qualify for Medicaidcoverage for nursing home care can transfer their own house to a family member without incurring any penalty from Medicaid, and without giving Medicaid any right to reimbursement from the house.
General rules: Ordinarily, an unmarried (single, divorced, or widowed) person entering a nursing home may keep his or her own house without the value of the property disqualifying the person from full Medicaid coverage of the nursing home costs. However, in that situation, Medicaid would be entitled to a lien against the house equal to the total amount Medicaid spends on nursing home care over the lifetime of the home owner. Medicaid can then collect on that lien when the nursing home resident dies.
If, on the other hand, the person entering the nursing home has given the house away to family members (or anyone else) within five years of applying for Medicaid nursing home coverage, Medicaid would have no right to reimbursement from the house. However, Medicaid transfer rules could mean a delay of months or years before Medicaid would begin paying for the nursing home.
Special circumstances: Three circumstances permit someone to transfer the home to a family member without either a Medicaid delayed-coverage penalty or a Medicaid lien on the property. A home may be transferred, without penalty or lien, to:
- The person's adult child, if: (1) the child has lived in the house for at least two years prior to the parent moving into the nursing home; (2) during that time the child cared for the parent; and (3) that care allowed the parent to remain at home for that time instead of entering a nursing home.
- The person's minor child, or blind or disabled child of any age.
- The person's brother or sister who had an ownership interest in the property from before the five-year look-back period and has lived in the house for at least the previous year.
Imagine the toll on the Medicaid program nationwide if all of us Baby Boomers tried to transfer rights to our parents' property in order to avoid paying for their medical care. With certain exceptions, for example, like those noted above, I may be in a minority on this issue; but I believe that my working-class parents lived frugally and saved, not to enrich me, but to ensure they had enough to be cared for in their years of retirement. If we all keep trying to "smart the system" we will all suffer; just as those who granted unconventional mortgage loans to those who could not afford a home were one of the straws that toppled the camel's back of our financial system. Result? We all suffer. What do you think?
Suppose the home is a mobile home and the title is in the name of the Family Trust.
I agree---we need to spend our parent's hard earned money on THEM, not us!!! When they're health failed them at about 72 years of age, I used ALL of Mom and Dad's money--including selling their home, cashing in insurance policies, savings, etc. to hire private duty sitters to help me take care of them and "spoil" them in a very nice Assisted Living facility until it ran out! The Lord took Mom to her heavenly home and she never had to go into a nursing home, but Dad did. He has been in a nursing home for over 2 years now with only his social security check left to his name. That is used to pay part of the nursing home and health insurance. He gets to keep $38.00 a month, $25.00 of which goes to pay for his telephone. My husband and I pay for anything else he wants/needs from our personal funds. It makes me sick to my stomach when I hear of kids thinking that their parents OWE them an inheritence!!!!
How about your parents working hard all their lives and would like their home to stay in the family and passed down to their children. I think the home should be exempt even after death. Now, if they also had investment and other assets as well then yes I could see reimbursing Medicaid from those assets.
I believe that the home should be exempt. My mom is 80 and has AD, my dad, 81, doesn't. We kept Mom at home for as long as we were able. It is costing more that my salary (before taxes) each month to keep her in a decent Memory Care unit. (Actually, it is a great unit.) My dad certainly doesn't have this kind of income and is so scared of not having enough to take care of him when the time comes. Most everything they had was jointly held. I don't have a problem with spending half on her but he needs peace of mind and deserves it, too. I am not looking at their things as MY inheritence. I already have everything I want from them that way - their teachings and values, their love, their acceptance of me, etc. My mom was very big on who was to inherit "The Farm". It was some acreage that she inherited from her grandmother and GreatGrandma got it from family. This is a wish of hers he wants to honor and it is not to me but my oldest daughter and granddaughter. The way he looks at it, they both worked very hard so they could take care of themselves and enjoy life toward the end AND have a legacy they could pass on. Not my words but his.
