In Yorktown, NY and the surrounding community, I often see the homestead as the single most valuable asset of an estate. The “American Dream” is to own a home, create memories there, and one day, leave it to your children. However, without proper planning, the dream can soon turn into a nightmare if nursing home care is needed. When someone requires nursing home care, it is often unplanned, leaving four options to pay for such care:
- private payment
- long-term care insurance
Most people, like it or not, will have no choice but to turn to Medicaid to pay for their long-term care. For Medicaid purposes, the homestead is treated as an exempt asset (with exceptions).
Medicaid cannot count the value of your home when determining eligibility. Most people do not realize that Medicaid will keep a running tally of the benefits that Medicaid pays on your behalf and can ultimately (i) place a lien against the homestead or (ii) file a claim against your estate to recover those benefits. Fortunately, a seasoned elder law attorney can offer planning solutions to avoid this hazard.
A popular technique is to transfer the house to a special type of trust which affords you many of the same benefits that you enjoyed individually such as the right to live in the house, the ability to sell the house and purchase a new one, the ability to deduct real estate taxes and continued benefits of certain exemptions. If you do not require nursing home care within the five years after transferring the house to the trust, the house will be protected and Medicaid cannot attack it. Upon your death, the house passes to your children (or any other beneficiary you designate) and the American Dream is preserved.
The New York elder law attorneys at Plan Today for Tomorrow are happy to provide you with the correct information regarding this, as well as, providing you insight to various other techniques to help protect your home and other assets. Please contact us or call us at 914-925-1010 to begin protecting your assets.