She is 85 and has only had Medicaid in the past 5 years or so . I’ve just recently learned that when she passes, that Medicaid could take her home. My mother worked and paid for our medical insurance when I was growing up, and she’s never been sick much. Now she has dementia and I am taking care of her when the nurse isn’t there. She still lives at home and a nurse comes in to help out during the day. Is there anyway we can avoid her house being taken over by Medicaid when she passes? Mama May outlive me, but I don’t want her home that she worked so hard for just to be taken away.
If mom went onto Medicaid after your state adopted Bush era DRA (Deficit Reduction Act of 2005), then State is required to attempt a recovery of costs paid by state from her after death assets. For some low income elders, they could have been on community based Medicaid for decades & before DRA so no MERP. For assets, whether recovery is limited to assets that could comprise an estate in probate OR can also include non-probate assets (like assets held in a Trust) depends on your state. Another factor is whether your state allows for a lien to be placed proactively or whether it can only happen as an after death action.
Under MERP there are exclusions, exemptions & a cost benefit analysis that factor in. Exemption you hear abt the most is for a caregiver; but you will need to provide to the state (or it’s outside contractor for MERP) whatever documentation to clearly establish you were a FT caregiver for a set period of time & why mom needed a caregiver (like on letterhead correspondence form moms old SW or MD as to her needs assessment that you provided). But there r other exemptions, like low income heir, aged sibling heir, property part of an existing business / farm / ranch. Exclusions are items that can be deducted from MERP tally, like some allow taxes, insurance, some maintenance deducted for a vacant property. Some allow for Lady Bird Deeds & Testamentary Trusts. But whatever angle you look at, it’s on you, DPOA, other heirs, &/or executor to keep what documentation needed on all this and do whatever filings that need to happen, hire whatever legal needed.
I’ve been on this forum a long time & what seems to be biggest hurdle for family is not being able to deal with costs - both $ & time - of having your elder continue to own the home as an exempt asset for an indeterminate period of time once they go onto LTC Medicaid (so are in a facility).
Right now as your mom is still in her home, she’s on community based Medicaid & ok on keeping her income to pay for her costs of living. Hopefully mom has enough SS & other retirement, savings. MERP is lurking in out there, but unless she dies, it’s not yet a biggie for you.
BUT
& this is super important imho- should she go into a NH, under Medicaid rules she is required to basically pay almost all her mo income to NH as her copay; then add that to apply for LTC Medicaid for most states the max in nonexempt assets is 2k. Mom will have no $. Mom can continue own home as exempt asset but no $ to pay taxes, utilities, yard, etc. It will fall to family to do & pay for whatever on a property they do not own for an unknown period of time and because of MERP run risk of not ever owning. So could you on your own pay for & do whatever needed for at least 3 yrs? If there are other heirs besides you, are you ok on their benefitting from things you do or pay for on moms place without getting reimbursed for years & years?
It’s like having costs & responsibility on 2nd home but w/out ownership.
It can be done, but you ime have to have a wallet, a sense of humor & ok on risk. If house if left empty, it will be easier to deal with.
What seems to happen is family all gung-ho first 6-10 mo then forgetabtit. Even if they have pretty solid exemptions, they flat cannot afford house. Pls please look at moms checkbook to see exactly what is needed to “own” the place. Can u easily afford this for years? Are u ok on risk? If not, and your mom is looking like needing a facility in her near future, I’d suggest you try to sell the home at FMV. The $ from sale she uses to private pay. Private pay will give her lots more options.
Keep in mind that we Americans do not fund the kind of healthcare systems that some European nations fund through taxes.
So, NC allows a lady bird deed to transfer the home to a beneficiary so there is no recovery on the home. In Michigan, we are allowed to do lady bird deeds at anytime even after the person is on Medicaid. I do not know of any other state that allows this but I also do not know the rules in other states. You should check with an attorney on what is allowed.
It is not being taken from her estate, the equity has a lien against it to provide her care while living.
https://www.elderlawfirm.com/north-carolina-medicaid-estate-recovery/
Since Medicaid is a joint Federal/State program, the rules vary from state to state.
maybe i am wrong.
https://www.elderlawanswers.com/medicaids-power-to-recoup-benefits-paid-estate-recovery-and-liens-12018.
and it could surpass the value of the home in which case its like the home is taken