Can State Force Sale of Joint Home to Pay Medicaid?

My sister and I have a deed of remainder fee simple on the home she lives in in Kentucky. We are both getting up in age.

Should one of us have to enter a nursing home, can the nursing home or state make claim to the house (condo.) or on its sell to help pay the cost of one of us staying there, even though both of us own it?

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Sep 10, 2010
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Medicaid and the home exemption
by: K. Gabriel Heiser

For an unmarried individual, a home is exempt from being counted as an asset for Medicaid eligibility purposes so long as the net equity value is under $500,000. So there would not be a requirement to sell the home if one of you enters the nursing home.

Upon the death of the nursing home resident, the interest may possibly be subject to "estate recovery" depending on how the deed is written and the law of your state. If you each own your interest in the house "with rights of survivorship," and if your state does not subject such property to estate recovery, then the surviving sibling will own the house 100% and the state can not make a claim against it.

If you own the house as "tenants in common," which means there is no right of survivorship, then the 50% interest of the deceased nursing home sibling can be attached by the state for repayment (up to the amount of Medicaid benefits actually paid by the state on that sibling's behalf).

One way around this is to have the nursing home sibling deed his or her 50% interest to the other sibling. Normally this would be a penalty-causing gift, but there is an exception in the law for such a transfer and no penalty would result. This can be done at any time during the life of the nursing home sibling, even after that sibling is in the nursing home.

So as you see, it can be complicated! Because of the variations in state law, it makes sense to work with an experienced elder law attorney to help you protect your life savings.

You can read more at www.medicaidsecrets.com.

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