One of the most common fears that families share with us when they start planning for long term care is whether Medicaid will be able to take their home. For many families, their house is their single biggest asset—they have paid off all or most of the mortgage, and they would like to protect the home as a legacy to pass on to their children.
The short answer to the question is no, Medicaid will not take your house—at least not while you or your spouse is alive and living there, or if a single person has the “intent to return home.” Because most people living in a skilled nursing facility will happily tell you that they fully intend to return to their home someday (even if that is not actually realistic), Medicaid will usually consider the home an “exempt” resource during the Medicaid recipient’s life. So why does everyone hear horror stories about Medicaid taking the home?
The reason most likely boils down to a misunderstanding about Ohio’s Medicaid estate recovery program. While a house is typically protected from a Medicaid spend-down during life, after the Medicaid recipient, and the spouse, if any, have both passed away, then Medicaid has the right to put a lien on the real estate due to the Estate Recovery program. This means that Medicaid will have a claim against the real estate (or any other assets that the Medicaid recipient had an interest in at the moment before their death) for the value of the services provided to the recipient during his or her lifetime. Unfortunately, when their is real estate involved, this means that the family will need to settle the claim with Medicaid before the real estate can be sold or transferred to the intended beneficiaries.
There are asset protection planning strategies that can be implemented when someone is motivated to try to fully protect their home. We often look at planning with an irrevocable Medicaid asset protection trust in these cases. In a best case scenario, these types of trusts are created at least 5 years before a person needs to qualify for Medicaid. But, if your crystal ball isn’t working at that level of accuracy, there is often planning that can still be done, even when someone needs long term care in the near future. As always, the sooner you ask the right questions and get all of the most accurate information available to you, the more options you will have at your disposal.
If this is something you would like to discuss in more detail, please call for an appointment at our office with Brittany or Kim. We would be happy to talk it through with you further.