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My father has a home worth appx $500,000. He is thinking about spending down his other assets to qualify for Medicaid. What would happen if he sells his house after he qualifies for Medicaid? Will the proceeds from the sale disqualify him from Medicaid.

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Yes possibly. Or he'll remain on medicaid and they will recoup the money from his estate later. In any event the proceeds from the house should be protected in escrow or a trust to prepare for such things. You should consult an attorney.
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Most states Medicaid program allow their home to be considered an exempt asset for the rest of their lifetime. the states actually have limits on property value as to whether or not the property will be allowed as a exempt. I'd suggest that you first find out what the figure is for your state as your first step in this decision.

Then although having a home sounds just dandy a couple of things will come into play on doing this: - if dad next year decides to sell the property then $$$ from the sale as its income will take him over Meducaid eligibility. Now some states will want the medicaid program reinbursed from the proceeds from the sale (for costs to date) & can have a lein on the property placed as you signed off on that by doing the Medicaid application so at closing the state gets its $; then dad spends down the rest of the $ before reapplying. Other states have it so once house sold, he's ineligible for Medicaid and upon his death, a claim is placed on his estate for medicaid reinbursement. As local tax assessor info is dovetailed to the state any sale or transfer will be known & to the penny.

Also if dad keeps the house, he will have no - none - nada - zilch of his $ to pay on anything on the house from now till sale or till death and through probate. Dad will be required by medicaid to do a copay or his SOC to the NH of his monthly income. Someone in the family will have to pay for all - insurance, taxes, maintenance, utility, etc - and from now till whenever. Taxes on 500large home alone will be significant. Can you do this for the rest of dads lifetime and beyond?

Keeping their home when they are in a NH is a lot like having a 2nd or 3rd home but without ownership and runs risk. For a low value home it's likely a do-able risk. But a 500k home, well to keep it you would likeky need significant funds to keep it however long and then to settle the lein or claim with MERP after death. Really look hard at the #'s to see if feasible.
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Igloo, great educational on medicaid/real estate issues. Thanks! WR
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