Is income producing property an exempt asset in Medicaid planning?

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Hi, I would like to know if income producing property is still an exempt asset in Medicaid planning? If so, are there any special rules to follow regarding this?

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In some states all income-producing property is exempt (although the income generated by that property will itself be countable). This is an example of why it is important to check out the rules in your own state. Note that even if the income-producing property is exempt and the owner successfully qualifies for Medicaid, the property will still be subject to estate recovery (recoupment) by the state following the death of the property owner/Medicaid recipient. So without careful planning, possibly all this will accomplish is a delay in paying for Medicaid!
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Maybe, maybe not. It depends on what the rules are in your state (they vary) and more importantly how the property is titled - individually owned, jointly owned or maybe a trust. I'd suggest talking to an elder care attorney or similar expert. Good luck
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Why aren't you asking the folks at the Medicaid office? You will get the best answer there.
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Medicaid is a joint state & federal program. Administered & managed by the state but under an overall Federal guidelines. Because of that each states specifics on property rights, death (estate) laws, etc make a big butt difference. Death laws are especially central to how MERP (estate recovery) works. You really need to find an experienced elder law attorney to give you accurate legal on your situation. I'd specifically look for one who has a practice in the county in which the income producing property is located. They will know the courthouse and the judges and make everything more efficient (and with less cost).

In TX, how income producing property is viewed seems to depend on the type f property and it's assessed value. (My mom is in TX still has her home and is in a NH on Medicaid now for a few years). If the property is a single home, and they maintain and file their annual homestead exemption and the property is under 500K in assessor value, then it is an exempt property for Medicaid. They do need to to an annual "I wanna return" document. The state now even has their own specific document that has to be filled out and done and submitted with their annual recertification for Medicaid. Our attorney did my mom's initially when she went into IL years ago and I just update it each year and she signs it along with the state's form. If the house sits empty or is occupied but they pay no rent, then there is no additional assets for Medicaid review. BUT if it is rented out, then the rental income counts towards their income limits for Medicaid (In TX $ 2,094.00 a mo). If it goes over that, they can get disqualified. Now the costs of rental property can be deducted but there seems to be a whole set of qualifiers on doing this and you either have to be very OCD and legal savvy or hire a property management company to do this for you and deal with the reporting to the state on the income and expenses on the home. In other words, total pain in the azz. If the property is a multi-unit or a commercial property with residential within, then it doesn't qualify for the asset exemption at all. The property will need to be sold & then the proceeds used for their spend-down before Medicaid will pay.

My mom's home sits empty, so no renters or income produced. I and another family member pay for all expenses on the property from taxes to insurance to upkeep. Upon her death we will each file for exemptions from MERP for all expenses paid on the house since mom's Day 1 at the NH on Medicaid. Under TX rules, these amounts are deducted from the MERP tally and lowers the amount of recovery $$ the state can go for in probate &/or file as a claim. TX is a level of claim state for probate and MERP is a class 7 claim. Again your state law is super important in how MERP is done.

Keep in mind that real property records (land, homes, property, auto's) are set by the local assessor annually and that info is in turn dovetailed into the state's database. So any property sale or transfer will show up and with ALL the information as to price and sold to whom. So really no trying to get cute and leave stuff out. It will be found out......eventually...... and then you get hit with a transfer penalty by Medicaid which is usually a total panic situation for family to deal with. Not pretty and an awful situation to place your elder in. Good luck.
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