Photo by National Cancer Institute on Unsplash

Question:

Both my husband and myself are on Medicaid and over 55. Neither of us has received nursing home care or in home care but my husband is being treated for cancer. Will Medicaid take our house after we die?

Response:

What a world (or nation?) we live in where people receiving cancer care have to worry about losing their home!

The answer is possibly, but you could plan to avoid such an outcome. To the extent Medicaid pays for your husband’s care, it will have a claim to recover its expenses against his estate. However, what would happen if he dies before you depends on how your state manages its estate recovery program. Assuming you own the house as joint tenants or as tenants by the entirety, upon your husband’s death the house will automatically pass to you alone. In many states, this would mean that Medicaid’s claim evaporates because the state only has the right to go after probate property, not property that passes outside of probate, such as a jointly-owned home. In those states that have expanded estate recovery meaning they can go after nonprobate property, the state must wait until your death to make a claim for your husband’s medical expenses. (To be honest, I don’t know how this works in practice. For instance, what happens if you sell the house and move out of state?)

If you were to die before your husband, the house would pass to him and then definitely be subject to claim at his death. The way to protect against this happening, and to protect the house if you live in a state with expanded estate recovery, is to transfer the house into your name alone now. Then there will be no risk that the house will be subject to claim for your husband’s medical expenses. You could also execute a new will that either bypasses your husband or puts the house in trust for his benefit in the event he survives you. Either step would also protect the house from any claim for your husband’s medical expenses even if you were to die before him.

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