If we rent out her house, is she still eligible for Medicaid?

2 answers | Last updated: Oct 22, 2016
A fellow caregiver asked...

My mother (85) is in a nursing home under Medicaid. She has a home (apraised value $15K) that is currently vacant. She has been ordered by the City to board up the windows, mow and exterminate it within 10 days or the City will take legal action. Our question is can the home be rented for no more than the cost of the property taxes and the tenant to keep it up, mow, repair etc. without it affecting her medicaid benefits? We were told it had to be available for her to return to when she is well. We were also told a family member could reside there. She has only her Social Security no other assets. The nursing home gets all but the $60 personal needs allotment monthly. Please advise. There are 4 children each with our own set of problems and its too far for any of us to maintain it. Of course, whatever has to be done we have to pay for it. We have had 3 cash offers for it but do not have a Durable Power of Attorney only a General Power of Attorney. My brother drove to mom's house this morning to see what we needed to do and found a hole in the roof and the sheetrock had fallen in the kitchen. Mother has dementia/stroke/diabetes/and all sorts of medical problems. We are wondering should we get a Judge to state she is mentally incompetent and obtain a court ordered Power of Attorney in order to make these decisions? Any help with these issues would be greatly appreciated.


Expert Answers

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.

Any income after expenses derived from the rental of the home would be required to be reported to your state's Medicaid office and would be required to be applied toward her Patient Pay Amount to the nursing home. However, if the reasonable rent was only sufficient to cover the costs of maintaining the home, there should not be any additional funds to be applied toward the Patient Pay Amount. Medicaid laws vary somewhat from state to state so you should consult an elder law attorney to make sure that this applies in your state.

You also may wish to check with the lawyer that drafted the power of attorney to determine whether or not it is a Durable Power of Attorney and provides sufficient authority to act on your mother's behalf in this matter. It has been many years since attorneys drafted powers of attorney that were not durable in nature.

If your power of attorney is not durable, it will be necessary for you to be appointed by a court as her guardian in order to act on her behalf. If so, you should consult a local elder law attorney. If you do not know of any, you should go the website of the National Academy of Elder Law Attorneys where you can find the name of someone who can help you.


Community Answers

Rk smith answered...

As parents age, there is always the possibility of having to place them into a nursing home. Siblings should always get power of attorney before this all takes place and the assests should be turned over to a family member "BEFORE" the parents become in need of being placed. Once you contact medicaid, you have nothing left. medicaid has full control over all assets once you place them on medicaid. When the parent dies, Medicaid comes in and takes over all assests. This is the only way they can get their money back for funding them for their care. Medicaid is not a free service. Keep that in mind. it is free only is you have no assests in your name and are in need of care. Such is welfare. Renting or selling the home doesn't help because medicaid have priority over the income. It's all part of the parents assest's.