Dear Mr. Di Costanzo: Can Medicaid take my home if I get sick?
If you fall ill, you may seek Medicaid benefits to help pay for your care at home or in a nursing home. If Medicaid begins paying for care, Medicaid can try to recoup what it has paid on your behalf either by filing a lien against your home or by filing a claim against your estate after your death. First it giveth and then it taketh away!
A Medicaid lien against your home means that the lien must be paid when your home is sold. Even if you own your home, Medicaid cannot place a lien against your home if your home is occupied by you, your spouse, a blind, disabled, or minor child, or a sibling who has an equity interest in the home and who was residing in the home for at least one year preceding the date you entered the nursing home.
In addition to having the ability to file a lien, Medicaid can file a claim against your estate after death. If you own a home at death, your Last Will and Testament will likely need to be probated so that your home can be sold. Generally, Medicaid’s claim would need to be satisfied out of the estate’s assets before any distributions to beneficiaries could be made. If the Executor ignores Medicaid’s claim, he/she may become personally liable for the amount owed to Medicaid.
Advanced planning is the key to preserving and protecting your home and possibly other assets. We regularly use irrevocable trusts designed for Medicaid asset protection purposes to protect your assets and ensure that your estate is not lost to the exorbitant costs of long-term care. These are commonly referred to as Medicaid Trusts. Medicaid cannot place a lien against your home if it is in a Medicaid Trust, and Medicaid cannot assert a claim after death against assets in a Medicaid Trust.
Whether by lien or through estate recovery, often, a substantial amount, if not all, of the value of your home may be lost to the costs of your long-term care. If you have children or others who may be the beneficiaries of your estate, their inheritance could be wiped out. This could all be avoided, however, with the assistance of an elder law attorney.
