Why can't I transfer my house to my kids to protect it

Dear Mr. Di Costanzo: I own my home. If I need to apply for Medicaid will my home be protected?

Your home is likely your most valuable asset and it is important to know if it will be protected in the event you need long term care.

If you are in a nursing home, Medicaid can place a lien on your home.  Once a lien is placed, you are not forced to sell your home, but when the home is sold, you must pay Medicaid back before you receive any of the sale’s proceeds. The best way to avoid having a lien placed on your home is to work with an elder law attorney to place your home into a Medicaid Trust five (5) years before you need to apply for Medicaid.

If you receive Medicaid for homecare services, Medicaid cannot place a lien against your home since you live there.  However, upon your death, Medicaid will file a claim against your estate equal to the amount of money they spent on your care. The Medicaid claim needs to be paid before any beneficiaries receive money, which can substantially reduce the amount of money your beneficiaries receive. A claim can be avoided by working with an elder law attorney to avoid probate.  The most common way to do this is by setting up a trust, whether a Medicaid Trust or the common Revocable Trust.

I often see people who think there is no planning they need to do because they only have a home or that they have worked with a social worker or nursing home to qualify for Medicaid and don’t need to meet with an elder law attorney because they are receiving benefits; but failing to meet with an elder law attorney can cause you to lose your most valuable asset.

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