04 Jun What happens to my house if I go into a nursing home?
Q. My house is in my name and my son’s name. What happens if I need to go into a nursing home? I don’t really have any other assets so I think I would end up on Medicaid quickly, but not sure what would happen to the house.
A. Timing is everything here.
The answer to your question may depend on when and how your son obtained his interest in your house.
If you owned the house and put your son’s name on the deed along with your name, you made a gift of an interest in the house to your son, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.
“Medicaid has a five-year look back period at the time you apply for Medicaid,” she said. “If you made any gifts during this look back period, a penalty period will apply in which you will not be eligible for Medicaid. If the gift was made prior to the five-year period, the penalty period is not applicable.
If your son purchased the interest in your house, then the Medicaid lookback rules do not apply, Romania said.
However, either way, Medicaid requires you to “spend down” your assets to $2,000 in order to qualify for Medicaid.
She said a home that you — or your spouse or disabled child — are living in will be considered exempt, but it will not be exempt if you, or your spouse or disabled child, are not living in it and have no expectation of returning to it.
“If you will not be living in or returning to your home, you will need to sell your interest in the home before you qualify for Medicaid or you and your son will have to sell the home and you will have to utilize your share of the proceeds before you qualify for Medicaid,” she said.
There is another possibility if your son is also providing a level of care for you for a period of at least two years. This allows you to remain in your home and not have to relocate to a nursing facility sooner, but this exception has a complex set of rules, Romania said.
If you’re concerned, because Medicaid is complicated, with its rules sometimes changing and can even be applied differently based on the county in which you live, you should consult with an estate planning attorney to make sure you take the steps that will be most beneficial to your specific situation.
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This story was originally published on June 4, 2021.
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.