A common question asked by elderly clients and their families is “When planning for Long-Term Care (LTC), is it possible to protect their home after mom moves into a nursing home?”

A very “lawyerly” answer is “Yes and No.”

This is why people love talking to attorneys so much.

Nursing home costs and expenses are steep. Unfortunately, many elderly individuals run out of money, but they still need long-term care. It is important to distinguish between what a nursing home wants and what Medicaid may require. In addition, recent shifts in Medicaid support have opened up alternatives you should be aware of.

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How would the Government (Medicaid) “Take” My Home

Medicaid is the Federally-funded, State run program that currently pays for the majority of all LTC expenses of the elderly in nursing homes.(1)

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Medicaid is a broken, under-funded government program. It provides insurance for the “poor” (2) and Long-Term Care for the “aged, blind, and disabled.” Medicaid is a “means-tested” program. This means, Medicaid defines limits on income and “countable resources.” Countable resources are assets that Medicaid deems spendable toward medical expenses – Long-Term Care and otherwise. These must be spent or structured in an asset protection/controlled spending plan prior to Medicaid paying your nursing home cost.

When a person moves into a nursing home, Medicaid assumes the former residence is no longer needed.

To qualify for benefits, Medicaid wants:

  • a declaration the home is to be sold or rented,
  • a Fair Market Value (FMV) price exchange, and
  • an update when the house sells or rents.

If everything else is in order, Medicaid approves the applicant for service. However, Medicaid may pause the applicant’s long-term care support while the net proceeds of the house sale pay the private rate until depleted. Once again, proper, timely planning controls the process to limit or to eliminate Medicaid’s “pause period.”

If the house is rented, monthly net proceeds count as income. This becomes part of the applicant’s contribution to his or her long-term care need. Again, proper, timely planning ensures the income increase prevents loss of Medicaid coverage in case the applicant’s income level is above the Medicaid threshold.

Be aware, upon the death of the applicant/patient, when the family sells the house or goes through Probate, Medicaid makes a claim to be reimbursed for money it paid out for Long-Term Care. Medicaid is a high priority claimant, which may claim against any available Probate or Revocable Living Trust assets, or net proceeds from the sale of property.

In Indiana, July 1, 2018, Medicaid created a state-wide policy that every person who was 55 or older at death must consider Medicaid a reasonably identifiable creditor and be notified as such.

This is a huge shift whether the decedent had long-term care expenses or not!

Medicaid is now seeking reimbursement for payments it made, including its contributions through the HIP program. Because of Medicaid’s position in payment priority order and its potential claim period, this may make many estates insolvent when a person dies.

How Would a Nursing Home “Take” My Home

Similarly, a nursing home asks about property, including the person’s home, during the admission process. They expect the home to be sold to private pay for the LTC. It is important to understand, it is in a nursing home’s best interest to have you private pay as long as there are dollars available.

A nursing home may charge upwards of $8,000 to 9,000 a month in our area – there are less expensive and more expense facilities. When Medicaid pays a person’s nursing home fee, Medicaid pays substantially less. That is one reason why many facilities have a limited number of “Medicaid beds.”

A nursing home reviews all of an elderly person’s assets – and if married, the spouse’s assets – to determine what to use to pay for Long-Term Care before it applies for Medicaid.

So, can the nursing home or Government/Medicaid take your home.

No, but both will assume and, in a matter of speaking, encourage a family to sell the home to private pay the nursing home cost before Medicaid begins to cover some of the necessary care.

Does an Elderly Person Seeking Long-Term Care Have to Sell a Home?

No.

(See, it can be easy to talk to an attorney)

BUT (most attorneys have a big “but” with their Yes’s and No’s), in order to control whether a home, other real estate, or property in general needs to be sold, design and execute a well-thought-out plan in a timely fashion.

When Should a Person Start to Plan to Control What Happens to an Elderly Person’s Home?

Prior to your visit to a nursing home is good. When the possibility of a need for Long-Term Care is on the horizon is far better. If you already visited a nursing home, some planning options are available. However, the nursing home and Medicaid hold far more control at that point.

Additionally, recent changes in Medicaid support provide some alternatives to Long-Term Care support in a nursing home. Most people prefer to stay in their homes as long as possible. That is now something that Medicaid allows at an increasing level. As another alternative, Medicaid provides Long-Term Care support in some Assisted Living Communities in our now.

If there is a Long-Term Care possibility, it is best to have a conversation with an Elder Law attorney about concerns, assets, income, wishes, and options. I suggest you find an Elder Law Attorney who is willing to provide this initial consultation for no charge or a very limited fee. You need to understand your unique situation and the planning options to consider. It is possible that some planning techniques require implementation sooner to maximize your control. However, you also want to understand the thresholds of care that warrant pursuing LTC. An Activities of Daily Living scale defines for Medicaid whether a person needs long-term care. It is also the scale a Long-Term Care insurance company uses to start its coverage.

An Elder Law Attorney can explain options that might be available in-home that may allow an elderly person to stay in his or her home longer. This is usually the preference.

What Can Really Be Done? Can I Just Put the Home in a Family Member’s Name?

There are several specific techniques that may be implemented to protect all or a portion of the value of a home, including purchases of a life estate, personal loan, joint purchases, personal service contracts, and post-pay to a family member for in-home care.

Each of these requires specific planning in design and execution. They require commitments from the elderly person and the participating family member or friend. Every technique is not appropriate for every situation. Hence, find an Elder Law Attorney willing to provide a free consultation to talk to you about your specific situation and the options that are comfortable for those involved. There is information below about how you can meet with me for your free consultation.

By the way, one bad “planning” technique is putting the home in another person’s name. People do this – and people still tell others this works. It is important to understand, Medicaid is the government. They have access to a lot of information about you. They create a “penalty period” equal to the value of the transfer that could have been used to pay the nursing home. See “The Double Penalty of the Penalty Period.”

Just When You Think You Understand Protecting the Home – Estate Recovery Pops Up

It is one of those “You can pay me now or you can pay me later” situations.

You have implemented and properly executed a plan that keeps the home from being sold and used to pay for a nursing home. However, if Medicaid does end up paying for a portion of nursing home care, the State can file a claim against your house after the person dies.

Estate Recovery allows the State to make a claim against your estate to be paid back. It can only make a claim for what it spent, which would be substantially less than a similar period of private pay. For example, private paying a nursing home for six months may cost close to $50,000 ($8,000 x 6). However, Medicaid would pay less than $5,000/month during the same six months. Medicaid has a set reimbursement (approximately $5,000, less Social Security and less other income paid to the nursing home). So, the State could make a claim for much less than $30,000. That could still be substantial. However, a proper plan should have provisions to reduce what is available to be available for Medicaid to file its claim against.

Good, properly timed planning is the answer!

Accordingly, before it is time for your loved one to enter a nursing home, you should consult with an experienced Elder Law & Estate Planning Attorney. With advanced planning, you can find ways to preserve some or all of the value of the home. Without proper, timely planning, any equity interest in a home may be required to be used to privately pay for LTC.

What Should All of this Planning Cost?

At CCSK Law, we strive to lower hurdles between our client’s legal issues and questions and the solution. One big hurdle is a fear of cost. It is a legitimate concern. The reality is some attorneys charge $5,000 to $15,000 for “Medicaid Planning.” Some may also charge an additional fee for the actual Medicaid application process.

In some cases, extensive planning is warranted. In other cases, it may not be.

Learn more about my approach to the planning process and fees..

If you do not understand what is being charged and why it is pertinent to your situation, you need to ask for a better explanation. Some things do not work for everyone. In addition, most planning techniques require precise timing, execution, and a commitment from people other than the person in need of care.

Valparaiso Elder Law & Estate Planning Lawyers

One of the biggest assets that many elderly people own is their home. However, what happens to the home if they must enter a long-term care facility can be worrisome. For this reason, it is important to review the options available to protect your or your parents’ home and to plan accordingly. Because planning is unique to each person, it is important to understand what will work best for you.

It can be complicated.

It is important to consult an experienced Indiana Elder Law and Estate Planning Lawyer, like me. I can advise you of any options you might have, and the consequences of each. And I’ll do it in a way that you will understand what and why the options work for you.

Call me, RG Skadberg, the Indiana Elder Law and Estate Planning Lawyer at CCSK, LLC today at (219) 200-3902. Or, click to learn more about RG Skadberg and to schedule your 30-minute free consultation.

(1) The Scan Foundation Report – thescanfoundation.org(2) “Poor” is relative to the Federal Poverty Level (FPL) that is released by the US Government annually. Under the Affordable Care Act, people who had income within 140% of the FPL income-qualify for Medicaid Insurance. Indiana currently calls its Medicaid program HIP 2.0.

Originally published in May 2017, this article was updated to reflect Medicaid changes and links to additional information in March 2018

About the author

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Founder/Attorney, CCSK Law
I create customized solutions for families to address their planning needs.
I provide plans clients understand. Also, they make sure they know when to use them, and do so affordably. I love the opportunity to break through the legal jargon to clarify issues. We find success when we work through a person’s situation and put the law to work for them.

25 Responses

  1. My mother has been taking care of my 98 year grandmother for over 5 years and my grandmother has become almost an invalid. Mom can’t keep it up and wants to put her in a home here in Colorado. My grandmother signed her house over many years prior and my mom sold it 2 years ago to help with home care. Can my mom put grandma in a home without paying back what she sold grandmothers house for?

    • Thanks for visiting the CCSK Law website.
      Medicaid is a hybrid program in that there are Federal Regulations as well as State regulations. Each State sets rules that often differ between states. As we are not licensed in Colorado, I cannot specifically address their regulations. The key things you want to check are lookback, whether the house transferred in the public record, and other local options that might allow for a child providing care to receive residential real estate.
      These can be difficult specific situations, so you should check with an attorney in the state in which your mother lives. Thanks and best wishes.

  2. WE HAVE BEEN DOING A RENT TO OWN FOR 3 YEARS NOW, 3 WEEKS AGO WE WERE TOLD WE HAD TO LEAVE THE HOME AS THEY WERE SELLING THE HOME BECAUSE THE OWNER WAS PUT IN NURSING HOME AND HER SON SAID THAT HE WAS TOLD HE HAD TO SELL THE HOME BECAUSE IT WAS IN HER NAME, WE NOW HAVE LOST ALL WE HAVE PAID INTO THE HOME AS WELL AS UP KEEP WE HAVE DONE AND JUST NTOLD TO MOVE. IS THIS TRUE AND WHAT ARE OUR RIGHTS.

    • Thanks for visiting the CCSK Law website.
      There may be options to discuss with the son and attorney. However, the are State specific. My current practice is limited to Indiana. If you the property is located in Indiana, I might be able to help you with some options. If you are in another state, you should contact an attorney in that state to see what options are available.
      If you are in Indiana, you can contact our office – 219.230.3600 – to start the conversation.
      Thanks and I hope we can help.

  3. My wife has 50% of a 2 family home with her elderly aunt who lives on the 1st floor and owns 50% of the home. She is about to go into a Nursing Home. Will the Nursing home take possesion of her 50 % when her savings runs out.

    • Thanks for visiting our website. Nursing home rules for payment vary between facilities. In some cases, they may try to have all of her assets paid to the nursing home for care. There are planning things you may be able to take advantage of. However, they are very state-specific. You should contact an attorney in your state for specific options. I am limited to working with people who reside in Indiana only. Good luck!

  4. My moms in a nursing home and I own half the house. Me, my son, and grandson are now living in the home, but they are hardly paying anything and I would like to rent out the home instead. Is there any way I can legally rent it without giving medicaid the money?

    • Thanks for visiting our website. The rules of Medicaid are state-specific. How a particular state would count rental income will vary. I can only speak to Indiana Medicaid, who would evaluate how the ownership of the property was acquired, how long ago, and how much rental income would be due to the person on Medicaid. Your state rules may be different. It is best to speak with an attorney who understands your specific state rules.

  5. My aunt was in a nursing home in Alabama. I live in Florida. I was not aware that laws are different in each state. I have been paying property taxes for her home for years. After she passed away I learned that Medicaid owned her home and that I would have to pay Medicaid before I can sell her home. My question is , was it Medicaid responsibility to pay property taxes? Can I be reimburse for the many years I’ve paid property taxes.

    • In Indiana, Medicaid does not take ownership of property. However, it may place a lien on property or claim against an estate to be paid on the proceeds of the estate.
      You should contact an attorney in Alabama to determine the proper procedure to consider, then determine if there is value worth pursuing.
      Good luck

  6. My parents are 86 (dad) and my mom (85). Dad had Alzheimer’s and is getting worse. Mom is getting where she can’t handle him. She weighs 96#’s and is about 4’5” tall. He is 6’ tall and weighs over 250#’s. He is physically healthy at this time, but he has become aggressive and threatens here. They are on Medicare not Medicaid. They have wills leaving my sister and me the two farms that they own should anything happen to them. They have not contacted any nursing facilities at present. Is it too late for her to go ahead and deed the property to us. My sister lives on property next to one farm ( she owns it) and I live on property on the other farm( I own it) but it’s a little different, it’s in the middle of the farm. We live in Barren County, Kentucky !

    • Thanks for visiting the CCSK Law website.
      Medicaid is a State specific program. My current practice is limited to Indiana. How assets are to be spent or otherwise managed will be dictated by each State’s rules.
      You should contact an attorney in Kentucky to see what options are available.
      Best of luck to you and your family.

  7. We just put my mom in a long time nursing home my question is I lived with my mother and was taking care of her for 11years I get SSI . my mom owns the home will I be able to stay in the home or will they take the home. I will have no place to go and can’t afford an apartment but I can afford the home expenses.

    • Thanks for visiting the CCSK Law website.
      Medicaid is a State specific program. My current practice is limited to Indiana. How assets are to be spent or otherwise managed will be dictated by each State’s rules. Your situation has some circumstances that need to be discussed specifically to make sure that options that might be able to help you are reviewed/implemented.
      If your property is located in Indiana, we may be able to help you with some options. If you are in another state, you should contact an attorney in that state to see what options are available.
      If you are in Indiana, you can contact our office – 219.230.3600 – to start the conversation.
      Thanks and I hope we can help.

  8. My mom is in the nursing home in Virginia . I was taking care of her for the pass five years Medicaid said t had to put the house up for sale now I have no where to live do I have any rights to stay there she also still have a mortgage to pay on the house

    • Thanks for visiting the CCSK Law website.
      Medicaid is a State specific program. My current practice is limited to Indiana. How assets are to be spent or otherwise managed will be dictated by each State’s rules.
      If your property is located in Indiana, we may be able to help you with some options. If you are in another state, you should contact an attorney in that state to see what options are available.
      If you are in Indiana, you can contact our office – 219.230.3600 – to start the conversation.
      Thanks and I hope we can help.

  9. My mom is in a nursing home in Indiana and has been for 2+ years. A liason at the first nursing home she lived in was able to arrange for her home to be exempted in the process of applying for Medicaid so she would qualify. There were 2 reasons for this. My brother had been living in the home with her for 13 years and we had taken out an equity line of credit for 75% of the value to pay for assisted living for her. My mom is now at end of life and my brother has moved out of the house. It is in serious need of repair. My question is: Will Medicaid require the sale of the house after my mom passes? If we invest the
    $ needed to repair the house , will Medicaid come back during the lookback time to be reimbursed?

  10. I live in Indiana. My Grandpa sold his house to me and my son on September 21, 2016 after my mother died. My son and I are both disabled and we live in the home. My Grandpa now has severe health issues, is incontinent, and can’t walk anymore. I am trying to take care of him at my house but I can’t take care of him like he needs to be taken care of. I was told that since we haven’t owned the house for 5 years and we have to put him in long term care that the nursing home could take our house from us. Is this true?

    • Thank you for visiting the CCSK Law website.
      Your situation, as described, brings a number of ancillary considerations into the planning conversation.
      To best address your options, please contact the office to set up an initial consultation. This can be done by phone or video call and there is no charge for this initial conversation.
      Please contact our office – 219.230.3600 – to start the conversation.
      Thanks and I hope we can help.

  11. My mother is in a long term care nursing home. She didn’t leave power of attorney to me or my sister. Only a will stating her assets be split fifty, fifty between me and my sister. Can the state take my mothers home and land?

    • Thanks for visiting the CCSK Law website.
      Medicaid is a State specific program. My current practice is limited to Indiana. As the article references, in Indiana, the State does not “take” property. There are limitations on countable resources that an individual can own if the person is trying to qualify for Medicaid to assist with nursing home expense. The nursing home may discuss selling property in order to provide the care your mother needs.
      How assets are counted or required to be spent is dictated by each State’s rules. Your circumstances would need to be discussed in more detail to determine options.
      If your mother lives in and her property is located in Indiana, we may be able to help you with some options. If you are in another state, you should contact an attorney in that state to see what options are available.
      If you are in Indiana, you can contact our office – 219.230.3600 – to start the conversation.
      Thanks and I hope we can help.

    • Thanks for visiting the CCSK Law website.
      Medicaid is a State specific program. My current practice is limited to Indiana. How assets are to be spent or otherwise managed will be dictated by each State’s rules.
      If your property is located in Indiana, we may be able to help you with some options. If you are in another state, you should contact an attorney in that state to see what options are available.
      If you are in Indiana, you can contact our office – 219.230.3600 – to start the conversation.
      Thanks and I hope we can help.

    • Thanks for visiting the CCSK Law website.
      Medicaid is a State specific program. My current practice is limited to Indiana. How assets are to be spent or otherwise managed will be dictated by each State’s rules. Selling property is much different than transferring property without payment. However, there are several things you should consider in the process.
      If your brother and his property are located in Indiana, we may be able to help you with some options. If you are in another state, you should contact an attorney in that state to see what options are available.
      If you are in Indiana, you can contact our office – 219.230.3600 – to start the conversation.
      Thanks and I hope we can help.

  12. Is there a time limit on when my brother-in-law can sell us his home so the nursing home won’t get it, if he needs to go to a nursing home?

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