Ways to Protect Your House from Medicaid Estate Recovery

June 8, 2020

For some, Medicaid and Medicare are the only options available for obtaining health insurance. They are slightly different from one another, but they are both federal programs that provide health coverage to those who need it.

Medicare is for disabled people who cannot work or are for people over 65 years old, regardless of income. Medicaid, on the other hand, is health insurance for those with low incomes. They also differ in terms of what services are covered, and they can also be used simultaneously if a person qualifies for both.

How is Long-Term Care Covered?

Another main difference between Medicaid and Medicare is that Medicaid covers long-term care, which is care for those with disabilities or those who cannot care for themselves, while Medicare does not. Most people on these federal programs are elderly and need help caring for themselves. When one starts to get older and must think about estate planning, Medicaid planning, and who can handle their affairs, most of the time their house is a major asset.

How Can You Protect Your House?

With Medicaid, the government will try to recoup the amount spent under coverage, so worrying about protecting the one major asset, the home, is completely reasonable and will need to be addressed. A competent, knowledgeable elder law lawyer is highly recommended and will give you advice on how to protect your house from Medicaid estate recovery. Some ways a house can be protected include:

  • Life Estates: A life estate may be the easiest way to protect your house, and most families will go this route as well. The person who starts the life estate will hold ownership of the house until he or she passes away. At that point, the other person, who took joint ownership in the life estate will take over. If you transfer the house earlier, you would trigger the five year “look back” period, which requires assets that are transferred below their market value before five years of applying for Medicaid. This prevents people from purposefully lowering their income to receive Medicaid benefits.
  • Selling the House: There is the option of selling the house, but most of the time, your family needs to live there. This option should only be considered for someone who is the sole Medicaid beneficiary, and if selling the home makes more sense because the amount of recovery is too high.

There are other options available to protect your house without a penalty. Early transferring can also be considered, but there is a possibility of needing long-term care earlier than expected, thus needing to be on Medicaid sooner than expected. The best advice is to contact an experienced lawyer who will assess all possible options.

Brooklyn Elder Law Lawyers at Korsinsky & Klein, LLP Help Families Protect Their Assets and Homes

It is vital to hire a knowledgeable and experienced lawyer to help you protect your assets. Our Brooklyn elder law lawyers at Korsinsky & Klein, LLP will help you and your family handle the complicated affairs of estates, assets, and will address all questions. Call us at 212-495-8133 or complete our online form for an initial consultation. Located in Brooklyn, Manhattan, and Lakewood, New Jersey, we serve clients throughout New York and New Jersey.