How To Protect Your House If You’re Moving Into A Nursing Home

If you or a loved one are planning on moving into a nursing home or long-term care facility, there are essential things to consider to protect your house and other assets. When your health is deteriorating, the last thing you need to be concerned about is the expenses for nursing home services. Planning early is the best way to protect your assets while being eligible for government assistance programs like Medicaid.

A knowledgeable North Carolina estate planning lawyer can help you save money and ensure that you are treated fairly so that you are not surprised by high fees and complex asset rules. First, let’s review what Medicaid is and the eligibility requirements for the program.

What Is Medicaid?

Medicaid is a public health insurance program that provides health care to low-income families and individuals, including children, parents, pregnant women, older adults, and persons with disabilities. It is funded with a combination of resources from states and the federal government. Each state runs its own Medicaid program, according to federal requirements.

Who Is Eligible For Medicaid?

Medicaid is an “entitlement” scheme, which means that everyone who meets the qualifying requirements can participate. It also implies that states can count on federal funding to cover a portion of the cost of their Medicaid programs.

Medicaid will not be available to everyone – there are income and asset requirements (limitations) and what is called a “lookback” period where the assets of a person are reviewed. In North Carolina, the lookback period is 60 months (5 years). Assets that count towards Medicaid eligibility include cash, stocks, bonds, investments, IRAs, savings and checking accounts, and real estate in which the applicant does not reside.

Also, sometimes people may be eligible but not wish to participate. Many people would instead not rely on the government for their health care, mainly because they could get better care if they paid for it privately.

While you are not required to sell your property to qualify for Medicaid nursing home care coverage, you should be aware that the state may make a claim on your home after you die through a process called Medicaid Estate Recovery. If possible, it’s essential to speak with an estate planning lawyer before entering a nursing home to explore how to safeguard your house.

Estate Recovery Under Medicaid

The only valuable asset owned by older adults who qualify for Medicaid is their home in many situations. If your family receives Medicaid assistance to pay for nursing home care, the state must seek reimbursement from their estate in a process called estate recovery. Here are some common situations that individuals may face, and how each situation is handled in the estate recovery process:

  • Single and living alone in the home: If you reside alone in a home with equity under a specific limit, Medicaid won’t take your home. If your home is not counted towards the asset limit and you get long-term care support from Medicaid, the state can file a recovery claim after your death. Currently (in 2022), that exemption amount is $636,000 in North Carolina.
  • Single and moving to a nursing home: When relocating to a nursing home, you can provide a written statement indicating your “intent to return home” for your home to be exempted under Medicaid rules. Without the “intent to return home” statement, your home will not be protected from Medicaid while you are in a nursing home. However, upon your death, the state may still file an estate recovery claim against your home to recover your nursing home expenses.
  • Single and grown children living in the home: If one of your grown children is disabled or blind, your home is considered “exempt” regardless of your equity interest. However, if all of your grown children are healthy, your home will not be exempt even if they live in it. If you have grown and healthy children living in the home, you can protect your home by filing an “intent to return home” statement to show you have plans to move back to your home in the future. However, this can only protect your home from Medicaid when you are alive. After passing on, Medicaid will try to collect your long-term care fees via Medicaid estate recovery. However, the state will not take your home if you have a blind, minor or disabled child.
  • Single and has passed away: If you are a single Medicaid recipient, the state will attempt to recover the cost of long-term care through a home sale. However, the state won’t do this if you have a child that is disabled, blind, or under 21 years of age at the time of your death.
  • Married with one spouse living in a nursing home: If one spouse relocates to a Medicaid-funded nursing home, the remaining spouse is considered the community spouse. The spouse retains the house regardless of the equity value in the home. If you are the community spouse, it is advisable to have the home’s title solely in your name to prevent Medicaid from making an estate recovery claim upon the death of your spouse. 
  • Married and one spouse in a nursing home dies: In some states, Medicaid estate recovery will attempt to recover long-term care costs from the sale of a home after the death of the living spouse. Others will only try to recover the costs if the surviving spouse was also a Medicaid recipient upon their death.

How To Protect Your Home

There are several common ways to protect your home from Medicaid estate recovery. They include keeping assets out of probate, utilizing irrevocable trusts, leveraging long-term care insurance partnership plans, or transferring assets in a way that is in accordance with North Carolina law and its 60 month lookback period. 

Our North Carolina Estate Planning Team Can Help

Estate planning is critical when you or a loved one are considering moving into a nursing home or other care facility in the future. With North Carolina’s 60 month Medicaid lookback period, the right time to plan for this transition is well before it happens. 

David Anderson and his team are here and ready to help. While we do not currently assist with Medicaid planning, we have trusted referral sources who can help. If you have a loved one who may be moving into a nursing home in the future, we are happy to speak with you about how we can help you properly navigate through the process. Call today or fill out our online form to schedule a consultation!

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