Medicaid seeking to recover the house that has been sold.

by John
(Bertie County, N.C.)

I'm looking down the road. I am still making payments on a house that my wife and I bought seven years ago. My wife recently passed away So, here I am trying to make ends meet on one income instead of the two incomes when my wife was living.

My neighbor and close friend has offered to pick up the note on the house and give me a lifetime right to it. Now, if I must be placed in a nursing home with Medicaid paying the bill, can Medicaid go after the house that has been sold to my neighbor and friend? If so is there a time limit that will change that situation and protect the new owner from losing or paying Medicaid for the house? Thank you so much for your advice.

John in N.C.

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Mar 08, 2017
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Sale of house retaining life estate
by: K. Gabriel Heiser

Hi: Basically you have sold a "remainder interest" in the house to your neighbor (because you retained your "life estate"). Upon your death, the house is fully owned by the neighbor. Since you don't own it and it won't be part of your estate, Medicaid cannot go after it to recoup their Medicaid payments made on your behalf. I assume you had an attorney draft the deed and that you didn't run afoul of the mortgage loan document terms.

K. Gabriel Heiser

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Marquette, Michigan
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