Our long-term health care needs and circumstances are unknowable. Appropriate planning with the aid of a knowledgeable estate planning attorney is essential to preserve your family’s assets. Consider this example:
Jane entered a nursing home several years ago originally expecting to move back into her two bedroom home. She has a will and as a widow intends to leave everything to her only son, Fred. Her only major asset was the house that she had lived in since she was a girl. Jane’s condition did not improve and she remained in the nursing home. In the state where she lived, the protective period for a single or widowed person’s home was only 6-months and at the end of this period, the house was put on the market for sale. They could not find a buyer for the house and Medicaid paid Jane’s nursing home bills and put a lien on the house. When they eventually found a buyer, all the proceeds went to paying Medicaid. Jane passed away and Fred buried his mother without the house that his mother lived in for more than 60 years.
Jane and Fred could have avoided this situation by planning ahead. Although they could not have predicted Jane’s nursing home stay, they could have met with an estate planning lawyer, learned the laws of their state, and prepared. Jane could have transferred the house to Fred (or anyone she chose) at any time at least 5 years before entering the nursing home and continue
to live in the house. Without other major assets, she would have been eligible for Medicaid immediately, no lien would have been placed on the house, and Fred would maintain the house. In short, planning ahead can preserve your estate for your loved ones.
Medicaid rules and regulations vary from state to state and are subject to change over time. In order to best understand the most current laws, we suggest you consult with an elder lawyer, like Adam Tobin.