FAQ: Do I have to sell my home?

by Jerrold Bartholomew

QUESTION: I am concerned about my parents. My dad just entered the nursing home. His care costs more $6,000.00 per month and my mother is almost out of savings. Does she have to sell the house (which is worth about $250,000.00) to pay for my dad’s care? And what about estate recovery? What is that?

ANSWER: Your mother does not have to sell the house and for now, it is safe as long as you follow the proper procedures to qualify for Medicaid. But there are still several concerns here.

First, most people needing nursing home care will end up receiving Medicaid assistance at some point. Many people make the mistake of thinking that they should just pay the nursing home each month without realizing that there are often estate planning options that can prevent the need for a full spend down. Seeing an elder law attorney during a nursing home spend down is a lot like seeing an accountant at tax time: there are a lot of deductions and exclusions that you would not otherwise know about that can cut your tax bill. An elder law attorney can help you minimize your nursing home bill in the same way.

With respect to your home, it is an exempt asset for purposes of Medicaid qualification. A nursing home patient in Michigan can own a home and still qualify for Medicaid. But there are exceptions to this rule and any non-homestead real estate would not be exempt.

Second, a house occupied by a nursing home patient’s spouse is not currently subject to estate recovery. Estate recovery is the process by which the state seeks reimbursement from a Medicaid recipient’s estate. Under current law, the state will not seek to recover costs against the home of a Medicaid recipient that is occupied by the recipient’s spouse. So that is not an immediate concern. But that law could change or it could be that the spouse living at home will have a dramatic change in health and perhaps need Medicaid assistance as well. At that point, the house would become subject to estate recovery and so it would make sense to begin planning for some of these potential problems now.

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