Medicaid Recipient To Inherit a House

by Maria D.
(Washington, DC)

Question:


A current Medicaid recipient in a nursing home will soon inherit a house. He lived in that house before going into the nursing home. Now, he wants to move back into the house after he inherits it. If he does so, will he still be eligible for Medicaid?

He would like to live in the house as his primary residence. Would he have to sell the house in order to stay on Medicaid?



Answer:

While there is no specific statute on this exact situation, as long the recipient has the "intent to return" to the home, it should be an exempt asset. Note that 11 states have more restrictive tests, such as a physician's examination and determination that the applicant is actually able to return home; if not, then the house would become a countable asset at that time.

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Sep 22, 2011
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Repayment?
by: Maria

Thanks. Would the Medicaid recipient have to repay Medicaid for any medical bills paid by Medicaid at some point?

Sep 22, 2011
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Estate Recovery Rules
by: Gabriel H.

Although the house may be an exempt asset during the life of the Medicaid recipient, if it is part of the estate of the recipient following the recipient's death, then it will be subject to "estate recovery," which is the process whereby states seek to be repaid for all the money they spent on the recipient via the Medicaid program.

Depending on the laws in your state, this can be easy or difficult to defeat. Also, depending on your particular facts, it may be possible to make a transfer of the house to a family member and incur no gift penalty.

Because there are so many options, you may want to take a look at the section on estate recovery in my book, "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets".



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