What Are the Rules for Medicaid Qualification (Part 3)? - Property Liens
As in part two of our series, your Medicaid planning advisor can best help you determine how the rules apply to your specific circumstances in your specific locality. Before you get into the specifics, however, it’s a good idea to familiarize yourself with the general federal guidelines for Medicaid qualification that apply everywhere.
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PROPERTY LIENS
In addition, the state can place a lien on an unmarried Medicaid recipient’s home, unless certain dependent relatives live on the premises or the state permits a “Homestead Exemption”.
Sale of the property, while the person receiving Medicaid is still living, could result in the loss of Medicaid coverage (due to excessive assets) and an obligation to use the sale proceeds to satisfy the lien that Medicaid places against the home.
There are exceptions to this rule. Satisfaction of the lien is not required if the applicant returns home prior to their death or one or more of the following...
Medicaid Planning - The Facts
MEDICAID PLANNING
The Facts...
Assets in a Revocable Living Trust are not protected and must be used to pay for the costs of long term care.
If you are married, your home is exempt and cannot be taken when applying for Medicaid. If you are single or widowed, your home is exempt up to $552,000 (2015). If you transfer your home to your children, not only will it result in immediate ineligibility for Medicaid, but it could also:
- Trigger a gift tax,
- Result in the loss of your homestead tax exemption, and,
- Result in your child’s spouse (the in-laws) inheriting your home.
Giving your assets away means losing control. It’s not safe even if you “trust” who you give it to. If that person divorces, goes bankrupt or is sued, all of the money you transferred is at risk. There are asset protection trusts that permit you to keep 100% control of your assets without the risk of losing them if long-term care is needed.
You do not have to wait 60 months to...