If you were to apply for Medicaid to pay for long-term care you have to understand the fact that Medicaid will try to recover monies spent to pay for your care after you pass away. It is important to take steps to protect your house from Medicaid recovery if you are in fact a homeowner who will be applying for Medicaid.
To provide some background information, many people who were never really poor apply for Medicaid as senior citizens because Medicare will not pay for long-term care. Because the program is need-based, you have to demonstrate financial need if you want to gain eligibility.
Your assets are evaluated, but everything does not count. The value of your home, up to $802,000 in equity in 2013, doesn’t count toward the asset limit of $2000.
It should be added that if you are married and your spouse is living in the home, or if dependents are still living in the home, there would be no upper equity limit.
The ownership of the home is not going to prevent you from gaining Medicaid eligibility if you need long-term care, but Medicaid recovery efforts can be initiated after your passing. The Medicaid recovery team will seek to attach assets that comprise your estate as a means of reimbursement.
Joint Tenancy With Right of Survivorship
It is possible to add a co-owner or co-owners to your property via joint tenancy with right of survivorship. When you pass away, the joint tenant or tenants that you add to the title of the property assume ownership of your portion of the property.
It would be logical to put two and two together and assume that you could use joint tenancy to prevent successful Medicaid recovery efforts. You simply add your child or children to the title of your property, and they would assume ownership of the home after you die.
They don’t owe the debt to the Medicaid program, so the Medicaid recovery unit would not be able to attach the home.
Under federal law, the Medicaid program can indeed seek to attach the portion of the home that you retained ownership of after you die. For example, if your son and your daughter were joint tenants, a third of the value of the home would be fair game for the Medicaid recovery unit.
However, some states are more aggressive than others about taking this route. In many cases the property has been re-titled in light of the death of one of the joint tenants before the Medicaid recovery people are aware of the death of the Medicaid recipient.
Protecting your property from Medicaid recovery can be complicated. To have all of your question answered, contact our firm to schedule a free consultation.