Question:

My neighbor’s wife has been in a nursing home for about 10 years. He is wanting to sell his house and move out of state to be with his kids (yes, I’m considering buying it). His home currently has a Medicaid lien on it for her time in the nursing home. How do we go about getting the lien off, or whom should we contact about him selling the land? If I purchase the land, will I be liable for anything?

Response:

That’s a long time in a nursing home!

My first response is that there should not be a lien on the property. Pursuant to 42 U.S.C. 1396p(a)(2), “[n]o lien may be imposed . . . on such individual’s home if . . .the spouse of such individual . . . is lawfully residing in such home.” So, the first step is to verify whether there truly is such a lien. If there is, I’d recommend consulting with a local elder law attorney to see what steps can be taken to have it removed.

Second, it sounds like the wife’s name is on the property as a co-owner. If so, her interest should be conveyed to her husband. If she is competent, she can sign the deed. But this sounds unlikely. If he has a durable power of attorney, he may have authority to make the transfer, depending on how the document is written. If not, he might have to seek a court order permitting the transfer.

Third, you can purchase the property from the husband, but you must be able to establish that you are purchasing it for fair market value. Otherwise the Medicaid agency may deem him to have made an uncompensated gift to you, causing his wife to be ineligible for benefits for a period of time.

As you can see, this is a bit complex and some of it depends on how your state agency applies the law. I’d recommend that your neighbor engage a local elder law attorney. He can find one at the website www.elderlawanswers.com.

Finally, to answer your last question, as long as you buy the house free and clear, you will have no obligation to your state Medicaid agency.

Related Posts:

Will Medicaid Place Lien on Nursing Home Resident’s House if Spouse Lives There?

Medicaid Estate Recovery and Liens

Can I Sell My House Despite Medicaid Estate Recovery?

Can I Sell My House Without Repaying Medicaid?

How it Works when Medicaid “Takes” your House