What happens to the home when a person enters a nursing home?
- The home will be protected if the spouse continues to live in the home while the applicant for Medicaid is in the nursing home. However, should the spouse move from the home or need long term care themselves, the home will no longer be protected. Therefore advanced trust planning is necessary by the healthy spouse to protect the home entirely, following the MassHealth eligibility of the institutionalized spouse.
- A transfer to a sibling with an equity interest living in the home for at least one year prior to the applicant entering the nursing facility can occur. For example, take the scenario of two siblings living in a two family house, one in the bottom unit and one in the top. In this case, the entire home may be transferred to the healthy sibling as long as they have lived in the home for at least one year prior to the sick sibling entering the nursing home. In order to satisfy the states requirement that the sibling have an equity interest in the property it needs to be owned jointly or as tenants in common or at the very least one must have a life estate in the property. If these conditions are satisfied, the home can be transferred to the sibling without a five-year look back period being applied.
- Sometimes a parent may have sold their home and may gift the money to a child in order to buy a life interest in the child’s home so that the parent can live there. The general rule indicates that the state agency considers the purchase of a life estate in another individual’s home made on or after April 1, 2006 a disqualifying transfer, unless the purchaser resides in the home for a period of at least one year after the date of purchase. This sounds great in that the waiting period for this type of transfer is only one year instead of the standard five years for all other transfers. However, like all things that sound too good to be true you may find that the drawbacks to this type of arrangement outweigh the possible benefits.
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Securities offered through Securities America, Inc. Member FINRA / SIPC. Advisory Services offered through Securities America Advisors, Inc., an SEC Registered Investment Adviser. Armstrong Advisory Group and the Securities America companies are unaffiliated.
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