Protecting a loved one’s home is often one of the primary concerns when Medicaid benefits are sought. Because it’s frequently the largest asset – especially for single persons – the decisions made regarding the home are critical. The home is an exempt asset under the Medicaid rules provided its equity value does not exceed $552,000 (unless the Medicaid applicant’s spouse, disabled child or child under age 21 reside in the home), but it can be subject to estate recovery after the Medicaid recipient dies. Some planning options to protect the homestead include:
- Transfer the home to the spouse.
- Transfer the home to a blind or disabled child.
- Transfer the home to a child under age 21.
- Transfer the home to a child over age 21 if the child lived in the home for at least two years immediately preceding the applicant’s admission to a nursing home and provided care that otherwise would have required nursing home care (verified by a physician’s statement).
- Transfer the home to a brother or sister provided the sibling is a part owner and lived in the home at least one year prior to the applicant’s admission to a nursing home.
If transferring the home utilizing one of the above options is not possible, a life estate deed can also be used to avoid estate recovery. To make sure your home is protected, be sure to consult with an experienced elder law attorney.