Can Medicaid take my property when I pass away?

2 answers | Last updated: Sep 19, 2016
A fellow caregiver asked...

If I have a will that says that my children will inherit my property or I'll add their names on the house, can the government still take my property away from my family after I pass away? as in the government wants me to reimburse the money from medicaid they used on me by taking my house from my family. (California) thank you.

Expert Answers

If someone owns a home but Medicaid (called Medi-Cal in California) pays for that homeowner's long-term care -- in a nursing facility, assisted living facility, or through a community-based program -- after the person reaches age 55, then Medicaid has a right to be repaid that money out of the value of the house when the homeowner (and a surviving spouse, if there is one) dies. (This applies to money Medicaid spends for long-term care only, not to Medicaid coverage of medical expenses.) Here's how it works.

The whole purpose of Medicaid is to pay for care for people who cannot otherwise afford it. So, the program has strict eligibility rules about how much someone can have in the way of income and assets. Obviously, ownership of a house is a large asset, and if the house were sold or mortgaged, that money could be used to pay for the person's care instead of Medicaid paying for it. But Medicaid rules allow a homeowner to keep the home for as long as he or she lives, and still qualify for Medicaid. What Medicaid does NOT allow is for people to have their cake (Medicaid coverage of long-term care) and eat it, too (pass the full value of their house on to their heirs). Instead, Medicaid can make a claim against the value of the house -- often in form of a lien -- so that when the person receiving Medicaid dies, Medicaid can be repaid the amounts it has paid for that person's long-term care.

This does not necessarily mean that Medicaid will "take" the house from your family. What it does mean is that the family will have to use the value of the house -- by taking out another mortgage on it, or by selling it -- to pay off the Medicaid lien after you die. So, for example, if the house is worth $200,000 and Medicaid paid $50,000 for your long-term care, your family would have to repay that $50,000 out of the value of the house -- by taking out a loan on the house or by selling it -- but the family would get to keep the remaining $150,000.

Community Answers

A fellow caregiver answered...

The same rule applies here in Ontario. However, if your home is in your childrens' name already prior to you going into Nursing home or Medicaid coming in to assist you. If this isn't done "Prior to" a word that you have to remember. Again if your children have to take a small mortgage on your home to pay Medicaid I am sure they wouldn't have a problem. What your children would have to do is have your home appraised and your or their bank would likely give them what they call a "Forgivable Loan". Its' not Forgiveable however the interest is low and much worth looking into. What they will allow (the Bank) is anything above 75 or 70 percent. So lets' say your home is worth 100,000. and it is paid for. They will send an appraiser in and if its worth lets say 125,000 they will allow you children to borrow on that over and above the 70 to 75 percent. So lets say they would loan your family or whoever you are leaving your house to approx. 50,000 to borrow on the home. So if this is what you owe Medicaid then they pay Medicaid the allotted amount and you keep the house at $50,000 with a very low interest amt. Your Barrister/Solicitor) would be of much help here in explaining the ins' and outs' of Medicaid. I am sure if the family can pay them with this loan, hopefully its' not over this amt. then they should be able to carry the house between them all. I do hope this helps' you out somewhat. Nothing is free anymore however your siblings can get a loan on your home just so they can keep it. Why give it to Medicaid. I certainly would not, and take the loss to boot. No doubt your have lived in this home for some time and it would be so unfair to them and yourself to just give it up. If your home is paid for I would prior to your passing (hate that word) however if you can get to the bank and tell them you want to borrow on your home. Its a Home Equity Loan, really a 2nd mtg. but at a very low rate. Put that money into another account and when Medicaid comes looking for their money, you will have money lets say in a Savings Account with at least your name and one or two of your Siblings name on this Savings Acct'. This saying that you are of sound mind, know what you are doing without any coaching. Once this is done, let your Lawyer know what has taken place. He may ask you to come into his/her office and talk to you directly (not with family) but a close friend so not one person can say after you are gone, that this took place in actuality and you knew what you were doing. The only reason I say friend and not a family member is because if later on down the road one of your siblings decides that they should get more/less then the papers' can be drawn up, your Lawyer will go to bat for you stating that on that said day you were of sound mine and nobody co-ersed you into doing such a thing. I wish you well, I wish you good luck. I am sending you a Big Hug and hope for the best which I am sure it will be. Take care!