Can I Sell My House Despite Medicaid Estate Recovery?
I have been receiving Medicaid benefits for ten years and had no idea until recently that the state could seek money for medical expenses they paid for after I turned 55. I am 65 and am planning to sell my house in a few years and move out of state to retire. Can they seek money from the sale of the house? If I die in another state, will they go after my estate, leaving less money for my heirs? Does the state seek the original amount of the medical expense or one increased for many years of inflation?
There’s good news and bad news. First, the good news: You can sell your house without reimbursing the state for the Medicaid benefits you have received to date. The state can only put a lien on your house if it’s paying for nursing home care for you. That doesn’t seem to be your situation, at least not yet.
Now, the bad news: The state’s claim for reimbursement against your estate applies no matter where you live. However, many states only seek recovery against the beneficiary’s probate estate and you may be able to avoid the claim by using a trust, joint ownership, or a life estate to hold title to your new home and other assets. (Here’s an explanation of the difference between probate and non-probate property.) A local elder law attorney can advise you on what steps make the most sense in your situation and in your new state. You can find one at www.elderlawanswers.com.
And the not-so-bad news: While your current state and your new state’s Medicaid agencies may both have claims for recovery against your estate, the actual process may mean that your estate only pays for any claim from the Medicaid agency in the state in which you are residing when you pass away. For instance, the mechanism for this is in Massachusetts requires all probate administrators to notify MassHealth (Medicaid in Massachusetts) of the probate proceeding so that it can assert its estate recovery claim, if any. But there’s no duty to notify MassHealth if the probate occurs in another state.
And finally some good news: In calculating the amount of recovery, Medicaid agencies use the actual amount paid out without interest or any adjustment for inflation.
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I live in nu, 11 years ago my mother died in a hospice facility, she was on Medicaid . The hospice facility did not accept Medicaid as a payor source, we promised the facility we would pay them out of the sale of her house, the house was sold for 169,000 2 months after her death. We paid the facility for her care at closing, we paid a government agency $20000 for work she had done on her house, we paid any debt she had. I thought because medicaid did not pay for her hospice care, we did not have to pay Medicaid anything. A long time later, I found out medicaid put a lein on my home for $160 000, The lawyer handling the case said he doesn’t have the records, it cost me $500 to find that out, the hospice agency doesn’t keep records after 7 years, the state agency was able to provide proof, we paid the money out of sale. My mother lived on social security for about $600, i supplemented her income since I was 18, my father died when I was 15, my mother stayed with me for 7 years before her death, she would sometimes go home a weekend, if my brother could stay with her, her Hope was to get stronger and be able to go home , that never happened. My husband and I bought our home, a humble home a town away from my mother so I could care for her it was one town away, less than 5 minutes in a car, I always cared for my mother, physically, and financially, This is so unfair, that we have a lein on our house, I have always done the right thing by my mother and my husband supported me in that, my husband is medically retired for 7 years, I need to retire, I am 67 and in remission for cancer. I am trying to resolve this before I retire. Are you able to help me? The only savings I have, is my employer saved money for all employees, I did not contribute, my husband condition is worsening as his memory is declining. I hope you can provide guidance, I did present documentation to nj estate recovery, they were considering my case. , however the worker went out on disability then covid hit. I am really trying to resolve as I need to retire.
I’m a little confused by the discussion of two homes. I can see why Medicaid would have had a lien on your mother’s home, but not yours. In normal circumstances, the lien would have been paid at the closing. Are they saying that that’s what should have happened and since it didn’t happen, they are asserting a claim against you?
I would recommend consulting with a local elder law attorney who can assess the facts and advise you on how to proceed. Often an attorney will be able to advise you on arguments and strategies to counter the state’s claim and perhaps be able to settle any claim, depending on the circumstances. You can find a qualified attorney at http://www.elderlawanswers.com. (I know attorneys are expensive, but you have a lot at stake.)
Father in law has been approved for Medicaid. Is receiving some in home Medicaid supportive care services currently. Only asset is 75k house. No car, 1k in savings. We have covered 15-20k in expenses for him over the last 4 yrs without repayment.
Can we purchase the house, pay ourselves back for the loaned money used for taxes and upkeep over the past 4 yrs, and require him to pay rent moving forward to us as long as he lives in the home, before going into long term care, without a look back penalty? Effectively using up, paying us back (paying legitimate expenses) most of the money received for the sale of the house?
You could do that. Once your father-in-law received the payment, he’d probably have to go off of Medicaid until the funds were spent down. In some states, he could preserve his eligibility by transferring the proceeds to a (d)(4)(C) trust. There’s also the question of how you documented your loans to him. If there’s a promissory note, you can definitely deduct what you advance from the purchase price. But without such evidence that the money you advanced was thought of as a loan rather than a gift, the Medicaid agency may treat any reduction in purchase price as a transfer to you, causing your father-in-law to be ineligible for benefits for a period of time.
You may be better off continuing to advance money to your father-in-law under an iron-clad promissory note and mortgage, to be paid back upon his death or when he owes you the full price of the house.
The best strategy can depend on how the Medicaid rules are applied in your state. So, I recommend that you consult with a local elder law attorney. You can find one on the site: http://www.elderlawanswers.com.
i get ssi and medicaid im 49 yr old if i inherit my mother’s house will medicaid kick me off or can they put a lien on the property years later if i die.i want to leave the house to my girlfriend
If you are living in the house your inheriting it will not affect your SSI or Medicaid. However, if you’re not living there, it would probably be a countable asset that could make you ineligible for both benefits. Assuming you are living in the house, you are correct to be concerned that Medicaid would be entitled to recover from your estate whatever it paid for your care after age 55. (Right now you’re under that age, so no claim is accruing.) One good way to avoid this claim would be for your mother to put the house in trust for your benefit during your life and then for your girlfriend’s. She could also give you what’s called a power of appointment to change the ultimate disposition of the house in the event you and your girlfriend broke up or she were to pass away before you.
I have inherited a property from an old family friend , neighbor for over 25 yrs. Her caretaker until she went to a nursing home for rehabilitation and unfortunately was not able to come home . I took care of her house since 2012 while she was in the nursing home till present .I moved in the home with her insistance when i became disabled and her house was much more suitable my for wheel chair. I have summitted a hardship waiver to medicaid for the medicaid lien. long story short.. My lawyer i hired to file my will has made a complete mess with everything 2016 when shirley passed he was hired to file the will that it . so I could get it in my name in order to get major repairs done. He shredded my original will …dragged out 2 yrs before telling me , had to ask the court to accept the copy of the will finally I have my letter of Testament 2019. Now to deal with medicaid lien before putting in my name …the lien is over 289000. The property tax assess at 80000. And in very bad shape , sale value about 60000.can I sell the house for true value to a family member to satisfy medicaid lien? And if so would I be able to buy it back from that family member without a problem?
I’m sorry you’ve had such a difficult time. To begin with, if you can prove your lawyer was not honest with you, you should file a complaint with your state bar. Dishonesty with one’s clients is a violation of the rules of professional ethics.
Unfortunately, the hardship waivers for Medicaid liens are often very strict, requiring you to follow a very strict timetable. While it sounds like you may well have missed the opportunity for a waiver, it’s worth seeking a second opinion from an elder law attorney in your state. You can find one at http://www.elderlawanswers.com.
In terms of selling the house to a family member, you can certainly do so, but you would still have to pay the Medicaid lien. I can’t tell you whether this would be better or worse than seeking a commercial mortgage. If you can’t qualify for a commercial mortgage, perhaps your family member would lend you the money to pay off the Medicaid lien in exchange for a mortgage.
My husband is in nursing home i sold my house can they take my money
It all depends on timing. If your husband has already qualified for Medicaid coverage, then you’re home free (so to speak, since you’re also house free); you can keep the money. However, if you are still spending down to qualify for Medicaid, the sale could be a real problem since the proceeds would simply be more money to spend down.
Thank you ,your guidance has helped my situation. Does it make any difference if i now put the property in my name while we are in the process of getting the info required for the hardship waiver for a final determination of the medicaid lein? Im told that i should get it in my name now to start the process in getting repairs done… Should i wait to put this property in my name until the hardship waiver is resolved? Im told it can take a while to have an end to this . thank you for anything you can help me with .
That’s good to hear. In terms of when to complete the transfer, I can’t really comment because the answer has to be specific to your state and its process. A local elder law attorney should be able to advise you or you might ask the Medicaid agency itself.
Hi, I’m 53 I receive home health aid services in my home for the past six or seven years in Philadelphia pa my 181/2 yr old son is my home health aid our home is inhabitable due to electric issues that can start fire any day and many other issues We need to move ASAP can I sell my home or will the state take it?
While I’m not an expert on Pennsylvania Medicaid, the answer should be no. State Medicaid agencies can put a lien on real estate owned by the beneficiary, but not while you are living in the house or are under the age of 55. You may lose eligibility for a time while you have the proceeds of the sale in your account. I’d recommend consulting with a local disability planning attorney to make sure you do not lose eligibility or if you do it is for a short period of time. You may need to shelter the proceeds in a (d)(4)(A) or (d)(4)(C) trust. You can find a special needs planning attorney at http://www.specialneedsanswers.com.
My father-in-law has been in a nursing home for the past year. He has a condo that he purchased for $107,000. He still owes around $80,000. Can he sell the condo to a family member for the amount owed? This is his only asset. He has no savings, no car, nothing else.
No, your father-in-law cannot sell the property for less than fair market value. The difference between the fair market value and the purchase price would be considered a transfer of assets, causing your father-in-law to be ineligible for Medicaid for a period of time, probably only a few-month gap given the numbers in this case. Further, it’s possible that your state Medicaid agency has a lien on the house, meaning that it would be entitled to reimbursement for funds paid out on your father-in-law’s behalf. If there is a lien, the buyer will not be able to get clear title without paying it off. You’re probably best office simply putting the condo on the market unless, perhaps, a family member is living there.
my neighbor is in the nursing home and wants to sell me his property under market value. value is 84k and he wants 50k, he has been on Medicaid for almost 2 years. There is currently no lien on his property at this time and his debts are paid. Can i make the purchase?? we are located in Ohio.
It’s complicated. Selling the home for less than fair market value will result in a transfer penalty for your neighbor of a few months. The length of the penalty period is based on the average cost of nursing home care in Ohio. If, for example, it’s $8,000 a month, the penalty period would be just over four months ($34,000/$8,000=4.25).
But your friend’s receipt of $50,000 will also make your neighbor ineligible for benefits until the proceeds are spent down. The question is how Ohio applies the transfer penalty. If it begins immediately, your neighbor can pay privately for his care during the period of Medicaid ineligibility and there will be no problem. If, however, they don’t start the penalty period until after the proceeds of the sale have been spent down, there could be a gap during which the nursing home is not paid.
You will have to consult with an Ohio elder law attorney to learn how this would work there. That’s assuming there’s an answer. This may happen so rarely that it may be impossible to know how it works until the actual situation is presented to the Ohio Medicaid agency. Then you and your neighbor would be rolling the dice on this.
I’ve been on Medicaid for some years now. My question is… if I get off for awhile and then the house sells as I’m going thru a divorce, does Medicaid take all my money?
No, Medicaid has no right to reimbursement during your life. It could have a claim after your death. State Medicaid programs are required to seek reimbursement from the estates of beneficiaries for payments made on behalf of decedents after age 55 and for nursing home coverage at any age.
You may, however, lose your eligibility for Medicaid going forward. Many Medicaid programs have limits on the level of assets recipients may own, often just $2,000. The proceeds of the house sale may be exempt for a period of time if you are in the process of buying another house. I’d recommend checking with your state Medicaid agency to see what the effect of he house sale will be on your future eligibility.