A very common issue for many clients is protecting their homes, or the homes of their loved ones, after moving into a nursing home. The general belief is that, when you have to move into a nursing home, Medi-Cal will take your home from you. This blog will answer the question: can nursing homes take your house?
Your home may not be counted as an asset
Generally speaking, you are not required to sell your home in order to qualify for Medi-Cal to pay your nursing home expenses. In states that implemented the Deficit Reduction Act of 2005, such as California, a person’s home is not counted as an asset for purposes of Medi-Cal eligibility, if the equity is less than $543,000. In those states that have implemented the Deficit Reduction Act of 2005, the home is not counted as an asset for Medi-Cal eligibility purposes if the equity does not exceed a specific threshold amount. In California, the equity limit is currently $814,000. In all states, Medi-Cal recipients are allowed to keep their homes, with no equity limit, if their spouse or another dependent relative lives in the home.
Estate recovery after your death
However, after your death, it is possible for your state’s Medi-Cal agency to file a claim against your house. That is because states are required to try to get back the benefits paid for your care from your estate. This is known as “estate recovery.” Typically, the only property of any substantial value that a recipient of Medi-Cal has at his or her death is the home. However, there are ways to protect your home, so consult with an estate planning attorney as soon as possible to discuss your options.
Transferring a Home to avoid estate recovery
In most states, simply transferring your house to your children (or someone else) will typically lead to a Medi-Cal penalty period. This penalty could make you ineligible for Medi-Cal for a specific period of time. Fortunately, there are a few specific circumstances where it is legal to transfer your house, but you should consult an estate planning attorney before attempting to transfer your home, when Medi-Cal is involved. For example, transferring your home to a spouse or a child who is under age 21 or who is blind or disabled, may be an option. Also, transferring the property into a trust for the sole benefit of a disabled individual under age 65, under certain circumstances, may be appropriate.
What happens if Medi-Cal puts a lien on my house?
Except in certain circumstances, Medi-Cal has the ability to put a lien on your house for the amount of money spent on your medical care. This means, if the home is sold while you are still living, you would have to satisfy the lien by paying back the state with the proceeds from the sale. Again, there may be exceptions where a spouse, a disabled or blind child, a child under age 21, or a sibling with an equity interest in the house is still living there. If you have questions regarding Medi-Cal, or any other Medi-Cal planning issues, please contact the Schomer Law Group either online or by calling us at (310) 337-7696.