02 Jul Medicaid says I have to sell my house. Will this plan work?

Q. I have a house. It’s not fancy but it’s livable. I applied for Medicaid and I have to sell it down. My grandson said he would buy it for me and let me live there for as long as I can. Will that work?
— Confused

A. Thank you for your question.

Medicaid eligibility can be very complicated.

In New Jersey, there are several different Medicaid programs and they have different financial eligibility requirements and program benefits.

A house owned by an unmarried Medicaid applicant with no minor or disabled children living in the house is an exempt asset if the Medicaid applicant lives in the house or has an intent to live there, and his or her equity interest is not greater than $906,000 in 2021, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park.

She said there are Medicaid programs whereby the applicant can receive benefits in the home.

“If the New Jersey Medicaid applicant is in a long-term care facility for six months or more, the agency presumes that the applicant will be unable to return home and requires the house to be sold,” she said. “If the house, is sold for less than fair market value, however, Medicaid will consider the purchase to be a gift and a penalty will be imposed that will disqualify the Medicaid applicant from receiving benefits when they otherwise run out of money for a period of time depending on the amount of the uncompensated transfer.”

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This story was originally published on July 2, 2021.

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