Protecting Your Home from the Nursing Home

You may be afraid of losing your home if you have to enter a nursing home and apply for Medicaid. While this fear is well-founded, transferring the home to your children or other family members before consulting and elder law attorney is not always the best way to protect it.

You generally do not have to sell your home in order to qualify for Medicaid coverage for nursing home care. However, Medicaid could file a claim against the house after you die. This is called “estate recovery.” If you want to protect your home from this recovery, you should consult an elder law attorney. At Joplin Elder Law, we will asses your individual situation and present a plan that is right for you and your family. You may be tempted to give it to your children or other family members. Here are the reasons not to before consulting with an elder law attorney:

Medicaid Ineligibility

Transferring your house to your children (or someone else) may make you ineligible for Medicaid for a period of time. The state Medicaid agency penalizes any transfers made within five years of the Medicaid application. Depending on the house’s value, the penalty period of Medicaid ineligibility could stretch on for years.

       There are circumstances under which you can transfer a home without penalty. You should consult Joplin Elder Law         before making any transfers.

Loss of Control

By transferring your house to your children, you will no longer own the house, which means you will not have control of it. Your children can do what they want with it. In addition, if your children are sued or get divorced, the house may be vulnerable to their creditors.

Adverse Tax Consequences

Inherited property receives a “step up” in basis when you die. This means, for tax purposes, the value of the property is calculated on the date of death instead of the original purchase price. However, when you give property to a child during your lifetime, they lose this “step up” and may have to pay capital gains taxes on the difference between the tax basis and the sale price if they sell it.

At Joplin Elder Law, we help families preserve the assets that they have worked a lifetime to achieve. Call today and schedule a free consultation to discuss your options for protecting your home and life savings.