Proceeds of Sale??Half equity interest

by Peggy whitt
(Madison, Al)

My Mother and I bought a house jointly in1988. She has been in a nursing home for six years on Medicaid. The house has been empty for six years. The State does have a lien on it. Can I sell the home now and get half of the proceeds? Will the State expect to get all of the proceeds?

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Jun 20, 2016
Impact of Medicaid Lien
by: Gabriel Heiser

A Medicaid lien placed on a house before the death of the Medicaid recipient protects the state’s right to be reimbursed for its payments to the nursing home on behalf of the Medicaid recipient. While it does not prevent a sale of the house, its interest attaches to the interest of the Medicaid recipient, which is one-half in your case.

If the house is sold, the state can oblige your mother to use her equity value to repay past Medicaid spending for long-term nursing home care and other services. The balance of the half of the proceeds attributable to the interest of your mother —if any--would be deemed countable assets for Medicaid purposes. As such, she would become disqualified from Medicaid until that money was either spent down or converted into some form that is not countable (like a pre-paid funeral or burial, Medicaid annuity, etc.).

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