Moving to a nursing home can be a really big step, but it can also be in the best interests of both an older person with advancing care and assistance needs as well as loved ones that may worry about the older person living on their own. As you move to a nursing home or help a loved one move to a nursing home, the question will probably come up regarding what to do with the house. This is a difficult and delicate issue to address not just because a person’s home holds so much sentimental and personal value. There are also the financial aspects to consider. Here, we will take a look at what to do with your home when moving into a nursing home.
What to Do With Your Home When Moving to a Nursing Home
When moving into a nursing home, you will likely want to consider selling it, renting it, or transferring it to your children or another family member. Each of these options has its own unique set of consequences that should be considered carefully. There will be insurance questions, tax consequences, and potential issues with impacting Medicaid eligibility to think about prior to acting.
For starters, you should know that equity in a home that falls below a certain amount will not be counted as an asset for the purposes of Medicaid eligibility. Furthermore, every state allows you to keep your home with no equity limit if your spouse or another dependent relative still lives there. Know, however, that equity in your home may not complicate your Medicaid eligibility, but Medicaid may file a claim against your house later on, after you die, in order to seek reimbursement for whatever benefits were paid out for your care.
Selling your house may result in a Medicaid penalty or jeopardize your receipt of Medicaid benefits and should be carefully considered prior to acting. Furthermore, there are many challenges that a person moving into a nursing home can face when simultaneously trying to sell their home. The house may need to be fixed up. There will likely be a number of assets and possessions in the home that you will need to be prepared to sort through and store or transfer prior to the home’s sale. It can be a lot.
You may, alternatively, want to consider transferring your home to your children or other relative. In fact, there are certain transfers that can be done without incurring a Medicaid penalty. Transfers that are eligible to be made without penalty include those made to:
- A spouse
- A child under the age of 21 or one who is blind or disabled
- A “caretaker child” which is a child of the Medicaid applicant who has lived in the home for at least two years prior to the applicant moving to a nursing home and who provided care during that time period which allowed the applicant to remain in the home and avoid moving to a nursing home
Elder Law Attorneys
If you or a loved one is moving to a nursing home, you are going to have enough on your plate as is. Let the team at Merlino & Gonzalez help guide you through the Medicaid and related legal issues that can arise amidst such a major life transition. Our team is here for you. Contact us today.