Leaving Home: Will Medicaid Exempt Your Senior Parent's House?

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Under the current Medicaid laws, even after you enter a nursing home, your personal residence will not be counted as part of your assets, in determining if you are eligible for Medicaid coverage of your nursing home costs.

However, if you are single and if your equity interest in your home exceeds $500,000, then your house will be counted, almost certainly causing you to be disqualified from Medicaid coverage.

If you are married and your spouse continues to reside in the home, then it will be exempt no matter what its value. Also, if you have a dependent or disabled child living in the home, again there is no value limitation.

But what if you are single and you move from your home to an assisted living facility, and later your condition requires you to move into a nursing home? Will Medicaid pay for that nursing home? Will your former home continue to be exempt?

Unfortunately, no. Once you moved out of your home of many years, it was no longer your "principal residence," so it lost its exemption. Now, some states will continue the exemption for up to six months, so long as you maintain that you continued to have the "intent to return" to your former home, but they are in the minority.

Indeed, even if you moved directly from your home to a nursing home (and for these purposes a short transitional stay in a hospital does not count), your home may not be exempt unless you continue to have the "intent to return" to your former home. Under federal law, if you cannot express this intent yourself, your spouse or dependent relative may express it for you. That being said, it is always a better idea to write down your intent to return home as soon as possible after you enter a nursing home, so that should it become necessary to document your intent, there will be written proof.

So the moral of the story is, if you move from your home to an apartment, independent living or assisted living facility, you probably should consider selling your former principal residence and dealing with the proceeds in a manner that will best provide for your care long into the future. Part of your plan may be to prepare for the eventuality of moving into a nursing home. If so, it is important to contact an experienced elder law attorney as soon as possible, so that there will be ample time to put a good plan into place, make gifts if advisable, etc. The sooner you plan, the more of your assets you will be able to keep.

K. Gabriel Heiser is an attorney with over 25 years of experience in elder law and estate planning. He is the author of "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets," an annually updated practical guide for the layperson.

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11 Comments

Seems to me that if an elderly parent has to go to assisted living/nursing home that all assets should go toward that care. My parents live on SS only and when the time comes when they can no longer live at home, their home certainly will be sold to go toward their care. I hear so many people talk about how they can keep Medicaid from taking their home or assets. Some people plan and sacrifice for their future and future care, if needed. Others do not and let the Government, i.e. (taxpayers) pay for their care. When I hear people trying to put their houses in their children's names, etc, I want to tell them that I don't want to pay for their care especially if they have resources! I really don't understand this. Therefore, it is fair that unless one spouse still needs to reside in the residence, then that residence needs to go toward their care.
I am my Mother's POA and in NC I had to sign a form stating that my Mom has all intentions of returning home even though she has dementia. I had to request DSS let me sign that form. The state now has a lien on my mother's house. She has been on medicaid since October 2012
my mom resides in California and is on medi medi and is in a skilled nursing home. Her monthly SSI ends the 30th of this month, but she may be able to return to her own home (with assistance) in a month or two. Without her monthly income she will lose her home she is renting. I saw somewhere a form (intent to return home) which funds payment for her rent up to six months. Does anyone know where I can find/file that form and how it works?