stumble Asked August 2013
Does Medicaid take your home after you the caretaker dies in repayment of the cost of care given?
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I live in FL and our income is low. My son and his family live with me and promise to care for me when I get old and in return they want the house when I die. A neighbor visited me a few days ago and said this would happen if I left him in the nursing home.
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OK, under MERP if you sell or gift or transfer the house (which is exempt property) then it is NO longer exempt and all the $$ from the sale of the home will have to be used to pay for his care. It will be a transfer penalty. If you gift it, the transfer penalty will be whatever is the fair market value of the home. This usually is whatever is the value on the annual assessor tax statement & bill. He will get disqualified from Medicaid totally till he spends down the amount that the house was worth or sold for. You will have none of the $.
Selling the house with your hubby in the NH on Medicaid is a very bad idea and will pose all sorts of problems.
You as his surviving spouse will inheirt the house and although MERP will have a claim or a lien for what Medicaid paid, MERP gives total exemption to the surviving spouse. You do have to file for this - MERP will send you a letter within 6 weeks after his death...very important to file the exemption. You will get the house totally. Then after that happens, I would suggest you do the "sale" to your son. You kinda have to wait till your hubby dies, your MERP exemption clears and the house is changed to be in your name totally and then you do a sale to your son afterwards.
how is his NH stay being paid?
If he went into the NH this year and Medicaid is paying for his stay, then MERP will be involved. Try to find the paperwork on his admission and go thru it all very carefully. There probably will be a statement -- could be a full page or just a smaller acknowledgement - that reads Medicaid Recovery (or Recoup) Program (or Policy). My mom's (on Medicaid in TX NH) is about 1/3 of a page and is done as an "Acknowledgement of Receipt". Her's does not require a signature.
So what is your situation, how old are you & what is your health like? Your son & his family, what are they like? and what is the possibility of them really being able to take care of you for possibly years & years.
What is the situation on the house, is it paid off and have the major items of a home (Roof, A/C and heat, water heater) been replaced on schedule? Are you all by yourself able to pay for whatever is needed for the house right now? (By that I mean all the taxes, insurance, utitlites, yard work & maintenance on house) If your son got the house would he & his family be able to pay for all on the house?
These are some things to think about before you decide to sell or transfer the house to your son. If there ever is the possibility of Medicaid being applied for (and I think that the reality is that eventually your level of need and the caregivers ability will give out and you will need to go to a NH), then you have to plan and do whatever ahead of the 5 year look-back for Medicaid. It is alot to consider and really as Carol said, you should speak with an elder law attorney to do whatever so that it will work & be correct legally.
About Medicaid, if a person applies for Medicaid and if they have a home that is their primary residence, the residence is an exempt asset for Medicaid. Most state have this exemption as good for their lifetime. The exempt asset changes once they die and then the property is no longer exempt. Then upon their death the state can file a claim or a lein on the estate (the house) to reinburse the state for some of the costs that Medicaid paid. This is called MERP - Medicaid Estate Recovery Program. All states have to do MERP and all state have exemptions to MERP. This info is on-line in your states Medicaid website.
MERP sends out a letter to family after you die to state that they (MERP) has a claim or lien on the estate and asks if there are any exemptions.There is a caregiver exemption for MERP if there was family who lived in the house for at least 2 years prior and provided full-time care that kept you from going into the NH (and onto state payment by Medicaid). But the exemption has to be filed and with supporting documentation. But what seems to happen is that family is still dealing with grief and doesn't get the paperwork in (doesn't even open the letter) and then has issues getting clear title on the house when they need to months or years later. Once the state has filed a claim all this gets really sticky and you heirs will have to get an attorney to deal with it.
So either pay for good experienced legal now or pay for it later but either way, it really isn't a do-it-yourself project.
However, some states have the view that if the caregiver has lived in the house for two years with the care receiver, they won't take the house. You really need to talk with a Medicaid expert from your state. One appointment with an elder law attorney should do it.
Good luck,
Carol