After Maria’s husband died, Maria’s daughter, Debby, persuaded her to sell the family home and move into Debby’s mother-in-law cottage. That way they could stay close and Maria could invest the money from the sale in a nest-egg on which she could live comfortably. The house sold for a handsome sum, Maria moved in, and life was good.
Unfortunately, soon after, Maria had a serious stroke and she ended up needing care she could only receive in a nursing home. Maria and Debby hadn’t consulted a lawyer, so they had done no advance planning. The value of Maria’s estate far exceeded the limits to qualify for Medicaid assistance, and Maria ended up spending everything she owned on the nursing home.
If only she had consulted experienced elder-law counsel at least five years before, she could have saved her entire estate for Debby’s inheritance. Not only that, there are ways to structure the sale of the home so that Maria could have saved the money, paid off Debby’s mortgage, and still qualified for Medicaid! Even if Maria and Debby had waited until Maria went into the nursing home, counsel still could have protected around one-half of Maria’s estate.
The law permits elders to save, to allocate their money, and to qualify for Medicaid. This knowledge is what you pay an elder-law attorney for. The money Maria could have paid for that educated guidance could have been the best investment of all.
As elder law attorneys we know a number of ways to protect homes from this kind of attachment. If you come to us at least five years before you anticipate needing nursing-home care, we can preserve your home or its value such that Medicaid will not count it, or lien against it, at all.
Or, if a child moves into the home and cares for an ailing parent for two years, permitting the parent to stay home and out of a nursing home, the house can then be given as a gift to that child without any Medicaid penalty or disqualification. Ordinarily, Medicaid heavily penalizes giving away property, but this is one exception.
There are other strategies available. The home can be given to a disabled child without penalty or disqualification. Or, you might keep the right to live in the house for your lifetime and deed the remainder interest to others, who will then own the house after you pass. However, each strategy comes with risks that must be fully explored before determining the correct one.
An overall plan that is tailored to suit each individual, and to meet as many contingencies as possible, requires juggling a number of puzzle-pieces. There is no one cookie-cutter solution. The key is to plan before you or your spouse may need nursing-home care.
Elder care is complex, but with prudent planning and the advice of an elder care attorney, this seemingly daunting task can be made manageable. Please do not hesitate to contact our office to start planning for your future, or if you have any questions.