The Medicaid program pays for most of the long-term care costs that are incurred by seniors in the United States. However, the Medicaid program’s recovery unit must seek reimbursement for expenditures from the estate of someone who owned property interests and has passed away after having received Medicaid benefits.
This sounds confusing. In plain English, Medicaid is only available to people who have countable assets that do not exceed $1500.00 in Ohio. Given this reality, your first thought may be that Medicaid recovery is pointless because people who qualify for Medicaid usually have no assets when they pass away.
This is true for the most part, but there is the matter of home ownership. We chose the word “countable” when we were talking about asset limits. The value of your home, up to a minimum of $543,000 of equity in 2014 in Ohio, is not included in your assets when Medicaid is evaluating your eligibility. A married couple can keep a bit more for the care and needs of the spouse who also lives in the community.
As a result, people do in fact pass away after receiving Medicaid nursing home benefits while owning real estate.
If the property was titled to you personally, it would become probate property. Medicaid estate recovery applies to probate property.
To backtrack, probate is the legal process of passing on assets from the deceased to their living heirs. Property that you personally own will not go to your heirs until the estate has been probated, unless it has a pay-on-death beneficiary feature. This is because those who have claims against the estate are given an opportunity to seek satisfaction. Medicaid recovery could be one of these claims.
Joint Tenancy to Avoid Medicaid Recovery in Ohio
Joint tenancy with rights of survivorship is a sophisticated way of describing joint ownership of property. For example, you could name your daughter as a joint tenant on the deed to your home. If you do this, she would be a co-owner of the property, and you and your daughter would have equal rights to it. After you die, your ownership interest in the property immediately vests in your daughter without the necessity of probate court proceedings.
Prior to 1993, Medicaid recovery was restricted to probate property. Therefore, a piece of property that was held in joint tenancy would not be subject to Medicaid recovery. At that time you could in fact avoid Medicaid recovery by adding a joint tenant.
However, legislation was enacted in 1993 giving the states the right to seek reimbursement for non-probate property. Ohio has chosen to exercise that right and, as a result, adding a joint owner to the house will no longer avoid Ohio estate recovery. The same result may apply to other joint assets.
But there may be other ways to protect a house from estate recovery when the co-owner or both owners die. This area of law is very complex and even minor mistakes can be costs. Your best bet is to work with a qualified Medicaid lawyer. To learn what may help in your own situation, contact our firm to arrange for a consultation.