By Barry Zimmer on February 4th, 2021 in Asset Protection, Elder Law, Medicaid
Medicaid should be on your radar even if you are going to qualify for Medicare because Medicare does not pay for long-term care. The Medicaid program will cover these costs if you can gain eligibility.
In this post, we are going to share some information about Medicaid estate recovery and your home, but we will start with a brief overview.
Long-Term Care Costs Are Looming
Everyone is aware of the fact that some seniors need help with their activities of daily living, but it may seem as though you will not be one of them. When you have been relatively healthy and capable throughout your life, it can be hard to imagine a time when things will change.
Statistics can be your friend when you are making projections on a subject like this one. Longtermcare.gov is a website that is maintained by the United States Department of Health and Human Services, and you can find a lot of useful information on this site.
According to research that that is cited, most senior citizens will require long-term care eventually, and 35 percent will spend time in nursing homes. The average length of stay is one year, and 13 percent of people that need living assistance require the care for five years or more.
You can expect to pay about $100,000 for a year in a nursing home in the Cincinnati area, so these costs are significant.
Medicaid and Home Ownership
Now that we have provided the necessary background information, we can focus on the purpose of this post. There is a $2000 Medicaid asset limit in Ohio, but there are some things that do not count, including your home.
However, there is an equity limit that stands at $603,000 during the current calendar year. If a healthy spouse is remaining in the home while their spouse is moving into a nursing facility, there is no equity limit at all.
Medicaid is required to seek reimbursement from your estate if you are enrolled in the program during your life. The only really significant asset that is not counted is your home, so generally speaking, this would be the only property that could be attached.
If you are in direct personal possession of the home at the time of your death, and your spouse is not residing in it, Medicaid could place a lien on the property. However, you can avoid this fate if you convey your property into an irrevocable trust before you apply for Medicaid.
Timing is key, because there is a five-your look back period. You have to sign the home over to the trust at least five years before you apply for Medicaid. This is not risky in any way, because you could continue to live in the home as usual.
Aside from a situation where a healthy spouse is still remaining in the home, there are a couple of other exceptions. No lien would be placed on the home if a disabled child is residing in it, and it would be protected if a sibling with an equity interest is living in the home.
Caregiver Child Exemption
There is also a Medicaid caregiver child exemption. If one of your adult children has been providing care for you in the home for at least two years prior to the submission your application, you can give the home to your child. The five-year look-back would not apply.
Access Our Estate Planning Worksheet
We have prepared a worksheet that you can go through to gain a more thorough understanding of the estate planning process. This is a free resource, so you should definitely take advantage of this opportunity to build on your knowledge.
You can get your copy right now if you head over to our worksheet access page and follow the simple instructions.
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