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My parents own a primary residence and a vacation home, do they have to sell one of them to be able to be approved for Medicaid before going in a nursing home? Both are in my mothers name who is healthy.

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LTC in a NH Medicaid for couples is way way more complex than for a widow or widower. If 1 is still ok to stay in the home as a “community spouse” & the other going into a NH, it’s can get to be quite the math problem & really they need a savvy elder law atty,  for couples - especially if 1 is a CS -I’d try to get an atty who is NAELA. Please realize that Medicaid is designed to be an “at need” program both financially & medically. In theory that means financially their exempt assets should be limited to a home with a homestead exemption and a car. 1 house & 1 car. Even if Medicaid involves a couple, it’s still 1 car.

In actuality it can be different. Between my mom & MIL I’ve dealt with Medicaid in 3 states - TX, LA & FL - where lots of folks have as a 2nd place everything from a camp down a shell road to megastory weekend place on the Gulf. If the 2nd property is in the same state, it’s going to easily show up in local tax assessor records which dovetails to state database. So Medicaid caseworker will find it. But if it’s in another state, it maybe won’t surface. If it’s recorded at the CH in another state in ones maiden name or a variant of their name, it will more than likely not ever surface. Although that sounds fabulous, it poses major problems as whomever does the application signs off that the information is correct/valid & state can go after whomever signed when found out, AND as often as a part of the 5 yr look back, old bank statements are included in application; so should that check your mom wrote to XYZ county Tax Assessor on the weekend property pop up the caseworker will red flag the application & they will be in Medicaid application hell, AND someone in the family is going to need to pay all the property costs of the 2nd home as Medicaid expects them to do a copay of their monthly income to the facility; even if 1 goes into a NH and the other stays in the community, the amount of income for the CS will be set pretty tight. Family is going to need to pay all property expenses on a property they do not own and may not be able to transfer after death without issues & Medicaid’s involvement due to the long arm of estate recovery. 

Should they both end up in a facility, all their monthly income must go to the NH due to Medicaid’s copay or SOC (share of cost) requirement. They get only a small 
personal needs allowance that averages $70 a mo. If that happens, someone in family will have to pay all costs on both properties till beyond death. I say beyond death as someone will end up being executor & going to need to open probate, deal with MERP ( Estate Recovery) & heirs. If there’s several heirs..... well family can turn on each other over totally insignificant stuff much less a vacation home. Costs could be substantial or manageable but you should take pen to paper to see what the co$t$ are likely to be over time. Can you afford it and afford without affecting your own finances?

Really have your folks meet with NAELA atty to find out just what kind of options are out there. If they are needing placement in the very near future, there’s only so much that can be done. But there’s always things that can be done to make the sale of the property better if family wish to buy it. Creative estate planning needs time to do, try to get an appt soon so there’s a plan forward for 2018.
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I agree that it must be a good idea for the OP's parents to take professional advice on how best to manage their resources.

But I must say I think you're all being very forbearing. Isn't Medicaid primarily intended to help people who would otherwise suffer hardship? I'm not sure having to sell one's holiday home quite counts as hardship, exactly.
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Even on Medicaid the program would place liens on the remaining home to pay for services received.

Get an appointment with an elder law certified attorney to assist with the Medicaid maze.

A vacation home would not be a primary residence. There may be benefit to keep it and rent it out to provide income to pay for care.
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You need to consult an attorney familiar with Medicaid and community spouse rules in your state. Generally, you can only exempt one home up to a certain value, but rules are different for married couples.
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Medicaid is a program for folks who are impoverished. But, the rules for couples are complicated and not a DIY venture, and also not a legal tangle for your cousin's lawyer friend.
Consult with a certified eldercare attorney in your parent's jurisdiction.
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