Medicaid and selling home

by Paula Greenfield
(Martinsburg WV)

MY sister went into a nursing home in 2011. I own one percent of her house which is located in WV. When she passes away will Medicaid take the house. Is it legal to rent it since I own one percent?

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Nov 11, 2014
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Equity Interest in Home
by: Mo (per Gabriel Heiser)

My guess is that the attorney who prepared the deed gave you a one percent interest in the home because there is a rule under Medicaid law that states that a transfer of the home to a sibling of the Medicaid applicant will incur no penalty if the sibling has an equity interest in the home at the time and was living in the house for at least one year immediately prior to the date the applicant was admitted to the nursing home.

If you are more concerned about estate recovery, there will also be no recovery made against the recipient's home (i.e., it will not have to be sold to pay back the state) when a sibling of the recipient was living in the house for at least one year immediately prior to the date the recipient was admitted to the nursing home (no equity interest is needed, in this case).

So if you have been living in the house for at least a year before your sister dies, then the house can pass to you without having to pay back the state for any Medicaid benefits it paid out on behalf of your sister. Of course, whether it passes to your or not depends on the wording of the deed and, possibly, your sister’s will, if any. You’ll need to consult an attorney about those questions.

You can rent out the house, but 99% of the net rental income must be paid to your sister.

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