I’m Attorney Thomas R. Mullen I’m asked this question all the time–plus the question at the end of this blog.
Do not trust well-intentioned friends with advice for your biggest asset: your home!
MassHealth follows the Federal Medicaid Law.
If your spouse enters a nursing facility your home is not counted at all!
The nursing home does not get your house;
The State doesn’t get your home;
When you pass away there is still no lien!
The nursing home doesn’t get your house; the State doesn’t get your home!
It’s really not that Medicaid “cares” about you….If they took your home, you’d perhaps
have to live under a bridge, dependent on the government; or worse, move in with
one of your children.
Now, for the home to be protected, you do have to be living in it when you apply for
MassHealth–that’s another great reason not to move in with your daughter
and her husband!
Alot of the Medicaid laws make no sense—why should they—after all, they’re written
by Congress.
This is why you need to speak with only an experienced elderlaw attorney.
Now, here’s the crazy part: You have to be living in your home when you apply for
Medicaid and during the entire drawn-out process. But, the day after the Medicaid
application is approved, the case is closed…and where you live is no longer their concern.
How can this be? During the application process, the at-home spouse can keep about
$115,000 and the home if she lives there…but, the day after the application is approved,
she can move out and hit the lottery and the state just doesn’t care.
Why Do Anything Now If The Home Is Safe?
Eventually, like all of us, the one in the nursing home will pass way. If you have done
no planning at all and then You—the unlucky widow–enter a nursing home…well then ,
there is no spouse in the house, is there? The house is now lost…it must be sold to pay
for your care.
So…right after the application for the spouse in the nursing home is approved, you need
to act to protect your house in case you are next!
“What to do” is to much for this blog, but you may consider a life estate or irrevocable
trust.
Can’t I Just Give My House Away?
NO. One of your children may get divorced, sued, or have to file a bankruptcy.
THEIR house–remember you gave it to them—is gone!
Recall at the beginning of this log I told you I was saving a question for the end?
Well, here it is:
WHAT IF THE SO-CALLED ‘WELL-SPOUSE’ DIES BEFORE THE ONE IN THE NURSING HOME?
Far too many people are complacent once they learn their home is safe if one of the
couple enters a nursing home.
We already know not everything goes according to plan: just ask Tom Brady of
the Patriots. But, you can plan for the catastrophe of the “well spouse” passing away
before the nursing-home spouse.
Most of us have heard about the five year penalty rule and may know a little about how
a trust works…(we’ll talk a lot about trust in a later blog). What the five year penalty rule
means is if you give your home or assets away(Don’t just give them away!) you are unable
to receive Medicaid benefits for five years from the date of the gift…I hope your kids
don’t spend that gift!
Even if you place them in an irrevocable trust, you still cannot obtain MassHealth
benefits for five years after the assets are placed into the trust.
Here’s a secret, though:
If you have a Will, and inside it there is a Supplemental Needs Trust, that trust only
gets “activated” at death, and there is no five year penalty at all. Everything can be
protected immediately!!
I hope this has been helpful to you. Lastly I need to have the following disclaimer. This
blog is not legal advice and you cannot act on this advice without consulting a
qualified elderlaw attorney..
