What happens to your house with Medicaid?

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Q. My mother is gone and my dad is 91. He needs long-term care but can’t afford it, so I’m thinking he has to go on Medicaid. He owns a home worth about $220,000 and only gets Social Security. The only other asset he has is my mom’s jewelry, which we think is worth close to $100,000. Does that count for Medicaid assets? What do we do?
— Trying to help

A. There are many considerations here.

Will your dad be staying at home or moving into a facility for long term care services?

“If he intends to stay home, he can keep the house and qualify for Medicaid,” said Geraldine Callahan of Callahan Financial Services in East Hanover. “If he intends to move into a facility more information would be needed, typically only one primary residence is allowed, there are exceptions.”

In most cases, Callahan said, the facility would become his primary residence and the home would have to be sold and funds spent down.

Personal possessions, such as clothing, furniture, and jewelry are typically a “non-countable asset,” she said.

“That means in most cases it would not be used to determine Medicaid eligibility,” she said.

You stated the jewelry is worth close to $100,000. Callahan said there may be exceptions to valuable jewelry under Medicaid rules dependent on which state you reside.

Consider whether the jewelry was appraised, if there are public records of the value and if you intend to sell it.

“The New Jersey Medicaid application does not ask you to disclose jewelry or the value of it, however, the Medicaid application does ask you to disclose cash on hand,” Callahan said. “If the jewelry is sold or transferred for less than the value, there could be consequences.”

This could include spending the cash down on her care, a penalty period assessed by Medicaid or even a denial, she said.

Callahan recommends you reach out to an elder law attorney if you need additional help with this tough decision. We agree.

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The post was originally published in November 2017.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.