One of the most important reasons to do Medicaid planning is to ensure that your house remains safe. It is a common myth that Medicaid will take your home from you when you apply. There is only a tiny bit of truth to this myth.
Your home will not be taken when you are approved for Medicaid, however, when you die Medicaid will put a lien on your estate for the total amount it paid for your care. If your home is your only asset, it will have a lien placed against it. For example, if Medicaid pays $60,000 in benefits, and your only asset is your home, a $60,000 lien will be placed against the value of the home.
In some states, this means that as soon as you die Medicaid will require the home to be sold so they can recover the debt. Other states may not be as aggressive, knowing that when the home sells, the money will come. The more strain on a state’s budget, the more aggressive they become in this regard.
There are a few ways that you can protect your home. In some limited cases, it may be possible to gift the home to an adult child, a handicapped child or a sibling. Spend down strategies may also work. To protect your home, you will need the help of an experienced elder law attorney that specializes in estate planning for Medicaid recipients.
