Protecting Your Home from Medicaid Liens

You spent years paying for your home and growing your family. So it’s hard to imagine your house being turned over to the state as reimbursement for Medicaid coverage instead of being left to the people you care about most.

How Medicaid Works

Administered by each state, Medicaid helps pay for long-term care after an individual’s funds are exhausted. In simplest terms, you’re expected to use any savings and assets you have to pay for your care. Once those are gone, Medicaid will kick in. Typically, you won’t have to sell your home in order to qualify for Medicaid coverage of nursing home care. But it is possible the state could file a claim against your house after you die to recoup Medicaid benefits paid for your care.

Planning for Medicaid

Long-term planning can help protect your assets so they can be passed on to your spouse or children, while still allowing you to qualify for Medicaid under the program guidelines.

When you apply for Medicaid in a nursing home, there’s a five-year “look-back” period. Any assets you’ve gifted or transferred within five years of the date of application are subject to penalties.

The good news is there are options to preserve your home and legacy for your loved ones — even if you’re within the five-year look-back period. In a majority of cases, we’re able to preserve your home without impacting your ability to get the care you need.

For instance, you may be able to take advantage of exemptions to the look-back period. If your spouse, a disabled or blind child, a child under age 21, or a sibling with an equity interest in the house, lives in the house, the state can’t file a claim against the house for reimbursement of Medicaid nursing home expenses. In other cases, we may be able to gift your home as part of a broader gifting
strategy when qualifying you for Medicaid.

How PBM Can Help

The case study below is a good example of how PBM has helped other clients and how we can assist you.

Richard, 81, is a grandfather and father of three and retired industrial equipment salesman. Along with some personal investments, he saved money through his company’s 401(k) plan. He has been diagnosed with early stage Alzheimer’s.

Richard’s family is worried about the high cost of care as his condition worsens. With the help of his daughter and eventually, home care, his plan is to stay in his home as long as possible.

The family needed a comprehensive plan to take advantage of financial assistance for Richard’s care while preserving his assets.

PBM was able to create a plan to preserve Richard’s assets while getting him the long-term care he needs. While remaining in his home, Richard was able to transfer his assets into an irrevocable trust. This allowed him to start the Medicaid look-back and to limit the amount he’ll need to spend on nursing home costs. In the meantime, he can immediately access home care services paid for by Medicaid. These services have no look-back period.

In the meantime, he can immediately access home care services paid for by Medicaid. These services have no look-back period!

By planning with PBM, Richard was able to get the care he needed and preserve his assets for his daughters.

Get Peace of Mind. Make a Plan.

By planning ahead, you’ll have more options for protecting your property and assets. PBM can help you with:

  • Deed Transfer/Retained Life Usage – This allows you to change the ownership of your home to another person, while still preserving the right to use and live in the property and keep your current tax exemptions.
  • Irrevocable Income-Only Trust – By transferring real property and other assets into the right kind of trust at least five years before nursing home Medicaid is needed, we are able to take the property and other assets “off the table” for Medicaid purposes. Unlike the Life Estate Deed, this option may help protect additional assets over and above the home.

Estate Planning Services

As the only law firm in Western New York focused on elder law and estate planning, we have the dedicated expertise to deliver peace of mind to you and your family. Learn more about our estate planning services.

We’re Here to Help. Contact Us Today.

We’re here to help you make a plan so you can rest assured knowing everything is taken care of ahead of time.

To set up a consultation about our Medicaid and estate planning services, call at 716.204.1055 or fill out the form below to send us an email.

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