Protecting the Homestead: Part 1
Posted by Jerrold Bartholomew on March 1, 2008
When a single person goes to the nursing home for long term care, there are several obstacles to overcome in order to preserve the homestead. First of all, the patient will be limited to just $2,000.00 in non-exempt assets. Secondly, the homestead will be at risk for estate recovery–a program by which the state can seek repayment of Medicaid benefits against the estate of a Medicaid recipient.
But perhaps the most dangerous aspect of this scenario is that the qualification rules will not allow any money beyond the $2,000.00 limit to be set aside for maintenance of the homestead without some fairly complex asset protection techniques. Gifting assets will result in a period of ineligibility that will not be served until the applicant is otherwise out of money and in the nursing home. Under previous law, it would have been an option to enter into a personal care contract in order to shelter some money. Personal care contracts are now reviewed by such exacting standards that few will pass muster. Current law requires at least some asset protection planning if the homestead is going to be preserved without imposing a hardship on other family members.
