Does Medicare do estate recovery for nursing home care?

Lee watts asked...

My parents owned a house in Whittier, CA. They have both died and the house is now owned by the Watts Living Trust with my brother and I as co-trustees. My brother lives in the house. He is 70 and disabled. If we leave the house in the trust and he has to go to a nursing home, will Medicare be able to take 50% of the value of the house?

Expert Answer

Steve Weisman hosts the nationally syndicated radio show A Touch of Grey, heard on more than 50 stations, including WABC in New York City and KRLA in Los Angeles. He is a practicing lawyer specializing in estate planning and is admitted to practice before the United States Supreme Court. He's a public speaker and commentator who has appeared on many radio and television shows throughout the country, and he's the legal editor of Talkers magazine, the preeminent trade publication of talk radio. His latest book is The Truth About Avoiding Scams.

I will assume that the house was transferred from the estate of the last to die of your parents to a trust for the benefit of you and your brother. The key question now is what kind of trust is it? Trusts come in many different variations. Medicaid law does provide for certain types of trusts to be ignored when determining the assets of an applicant in your brother's situation and thus would not be considered a countable asset of your brother in determining his eligibility for Medicaid benefits. However, not all trusts would meet the Medicaid standards and I am concerned that your brother is also a co-trustee. I suggest that you contact a local lawyer who is a member of the National Academy of Elder Law Attorneys to help you with this.