Know the Law: Medicaid Planning – Is My Home Protected?

Whitney Gagnon Headshot
Whitney A. Gagnon
Director, Trusts & Estates Department
Published: Union Leader
September 15, 2019

Question: My spouse requires long-term care in a nursing home and Medicaid benefits to finance such care. Will I be able to continue living in my home?

Answer: A home is generally considered an excluded asset and protected for Medicaid purposes, allowing the spouse at home to continue residing in the home without affecting the other spouse’s access to long-term care.

Medicaid is a joint federal and state health insurance program that provides public benefits to individuals in need. To be eligible for Medicaid, an individual (and the individual’s spouse) must meet certain financial eligibility criteria.

Not all assets are included in the determination of an individual’s (or couple’s) assets for Medicaid purposes. For example, a home (with an equity value of less than $585,000 in 2019 and that is not owned by a revocable trust) is considered an excluded asset if your spouse is living in the home.

Even if your home is considered an excluded asset, it may be necessary to change the ownership of your home from joint ownership to solely in the name of your spouse at home to avoid the right of the state to place and/or enforce a lien against your home. Such a change in ownership would also ensure that your spouse at home is permitted to retain all of the sale proceeds if the spouse decides to sell your home in the future.

A home is also considered an excluded asset if you have a minor child or a child with disabilities living in the home. If you are not married and it is expected that you will return home in the future, your home is similarly excluded. Further, if your home is jointly owned and the co-owner is unwilling to sell the home, your home is excluded.

Although you could be disqualified if you transfer assets for less than fair market value five years prior to applying for Medicaid, there are circumstances in which you could transfer assets without being disqualified.

For example, you may transfer your home to a child who lived with you for a specified period of time prior to your move to a nursing home if the child provided certain care to you. Another type of permissible transfer is to a sibling who has an equity interest in the home and who resided in the home for a specified period of time prior to your move.

A Medicaid plan should be structured based on your health care wishes and estate planning objectives, ensuring that you maintain assets that you might need or want in the future, and taking into consideration any adverse income and capital gains taxes.