So, if your Mom tries to transfer her house to you within 60 months of her applying for Medicaid, that transfer could render her ineligible for ABD Medicaid for many months. There are, however, some ways to avoid this penalty when you transfer an applicant’s homeplace.
Transfer to Community Spouse
One exemption from the transfer penalty is to transfer of the homeplace to the community spouse. This will remove the homeplace from the applicant’s name and prevent it from being subject to estate recovery when he or she dies.
Transfer to a Sibling
Another option is to transfer the homeplace to a sibling who has an equity interest in the home and has been living within the residence for at least one year. Such transfers are not common, but can be a good option to consider.
In much the same way as the transfer to a community spouse works, a Medicaid applicant can transfer her house, via gift deed or quitclaim deed, to the sibling, and this transfer will not be subject to a penalty and will not affect a Medicaid applicant’s eligibility.
Transfer to a Child
Perhaps the most used exemptions involve transfer of the homeplace to a child of the Medicaid applicant.
A Medicaid applicant may transfer her homeplace to a child under 21 or a child who is blind or permanently disabled. This type of transfer may involve giving the homeplace to the qualifying child outright or transferring the homeplace to a trust for the sole benefit of the qualifying child.
The other option is to transfer the homeplace to a caregiver child. A caregiver child is a child who has been residing within the homeplace for at least two years prior to the transfer and the application for Medicaid.
To qualify, the caregiver child must have been residing full-time in the homeplace and providing adequate care that allowed the Medicaid applicant to avoid the nursing home until the point of the Medicaid application.
What Else to Know?
In cases of both the sibling and caretaker child transfers, your primary focus should be getting your name on a bill of some sort. This shows that you have been residing on the property.
All of these options also serve to not only avoid ineligibility for Medicaid, but can also help prevent estate recovery. Estate recovery is when Medicaid tries to get back the money they paid for the applicant’s care by placing a lien on the homeplace. Oftentimes, people can rack up hundreds of thousands in bills during their stay in a nursing facility. Medicaid will want their money back, and so they can try and get it back by encumbering the assets of a Mediaid applicant’s estate.
While considering any of these options consult an elder law attorney before you make any transfers to ensure that those transfers are exempt from any Medicaid penalties. If you make a transfer of the homeplace that isn’t exempt, you could face the imposition of costly Medicaid penalties.
Call Someone You Trust
When you need assistance with Medicaid application or eligibility, J. L. Williamson Law Group can assist you. We understand that a transfer of the homeplace can come with questions, so our elder law attorneys are experienced and can provide guidance on what options are available to you.