Will the Nursing Home or County Take My House?

As an attorney practicing in elder law one of the most common questions I get is this: If I or my spouse need nursing home care, will the nursing home take our house? Or, similarly, if I or my spouse need assisted living care or memory care, will the county or state take our house? This is understandably a scary thought. Everyone’s home feels special and sacred, full of memories, and the result of a lifetime of working and saving to make your home just right or to finally get the mortgage paid in full.

So, will they take your home if you need long term care? The simple answer is: No. They can’t “take” your home. But could your home be subjected to a lien in the future? Yes, it could.

To begin with, no skilled nursing facility, assisted living facility, memory care facility, or other long-term care provider has the power to “take” your home or put a lien on it. Only the government has the power to do that. When you or your spouse needs care, you pay the care provider until you are able to qualify for Medical Assistance, and then Medical Assistance pays the care provider on your behalf. Medical Assistance is a state-run program administered at the county level. The county keeps a tab on how much money is expended by them on your behalf for Medical Assistance benefits. Ultimately, it is the county that has the power to attach a lien to your home to collect the value of the benefits paid on your behalf or on behalf of your spouse.

When you apply for Medical Assistance, the house you or your spouse lives in is treated as an excluded asset, which means that it is not counted toward your asset limit and you can keep the house as long as you or your spouse continues to reside there. But when you both die, the county will have a claim against the estate of the surviving spouse to collect the value of Medical Assistance benefits paid on behalf of either spouse. In other words, the county cannot collect any money from you or your estate or put a lien on your house until after you and your spouse are deceased.

So, where does this idea come from that the county or nursing home can take your house? Well, there are a couple of instances where this can become an issue. First, consider what happens when a single person goes into a nursing home or where both spouses go into a nursing home. Can they still protect the house? The answer is: No. They have a six-month grace period and then the house has to be put up for sale. Does the county take the proceeds from the sale of the house? No. Again, as long as the Medical Assistance recipient or their spouse is still living, the county cannot take anything. But the proceeds from the house sale will have to be spent on nursing home care, which may be why many people think the nursing home “takes” the house. If neither spouse is capable of residing in the home, the home generally has to be sold and the proceeds spent on care.

Second, a lot of people try to leave the home to their children when they die. But when a single person or the surviving spouse dies, the county can put a lien on the house to collect the balance of Medical Assistance benefits paid on behalf of the deceased person or their spouse. In most cases, the children who inherit the house will have to pay off this lien before they can transfer the title to the house into their names. And in most cases, this means selling the house to pay off the lien. Again, the county doesn’t “take” the house, but they force a sale of the house to collect the Medical Assistance estate recovery claim.

Are there ways to protect the home from having to be sold to either pay for care or pay a Medical Assistance estate recovery claim at death? Yes, there are! And you should talk to an experienced elder law attorney for advice on how to protect your home as soon as you anticipate the need for long term care.

Call for a free 15-minute consultation today!

Elder Law Basics Series: Medicaid Eligibility

In a prior post in the Elder Law Basics post, I explained the difference between Medicaid and Medicare. For elder law purposes, the main distinction is that Medicaid pays for long term care services whereas Medicare provides traditional health insurance and only pays for short-term nursing home stays. In this post, I’m going to address what makes a person eligible for Medicaid, or as we call it in Minnesota, “Medical Assistance.”

First, it’s important to understand that there is a distinction between income-based Medical Assistance (MA) for low-income adults and MA for long term care (MA-LTC). Qualifying low-income adults and children may receive health insurance benefits through MA and there is no asset limit to qualify. But if you have a disability and need a nursing facility level of care either in a skilled nursing facility, assisted living facility, or at home, then income-based MA will not cover what you need. In that case, you need MA-LTC or what is referred to as a “waiver program.”

MA-LTC covers long term care services, which are skilled nursing services offered in a traditional nursing home setting. “Waiver programs” cover the same services, but in a community-based setting, such as assisted living facilities, memory care facilities, or at home. There are several different waiver programs offered in Minnesota for various needs, including the Community Access for Disability Inclusion (CADI) waiver for persons with disabilities under age 65 and the Elderly Waiver (EW) for disabled persons 65 and up. The financial eligibility rules for MA-LTC and all waiver programs are substantially the same even though each program is designed for people with different needs.

For MA-LTC and all waiver programs, there is an asset limit for both the person receiving benefits and their spouse, if they are married. For the person receiving benefits, the asset limit is $3,000. This figure has not changed in many years, and seems unlikely to change soon. For the person’s spouse, they are limited to $126,420, but unlike the MA recipient’s asset limit, the spousal asset limit is adjusted annually for inflation. Certain assets do not count toward either spouse’s asset limit, including their primary residence, one vehicle, and personal belongings (like clothing, electronics, furniture, etc.). All other property, however, does count toward the asset limit, including retirement accounts (IRAs, 401(k)s), most trust accounts, and all other real estate (farmland, cabins, etc.).

In addition, the MA recipient’s income is calculated and contributed toward the cost of their care, with certain limited exceptions, such as a personal needs allowance ($102 per month), and in some cases additional income may be given to the spouse to cover excess housing costs. The income calculation for waiver programs can be quite complicated, and some people may not qualify for a waiver program if their income exceeds their care costs. But the spouse of an MA recipient is not required to contribute their income for the MA recipient’s care, in other words, there is no “spousal income deeming” for MA. This makes possible certain asset protection strategies such as planning with Medicaid-compliant annuities.

In addition to the basic financial eligibility requirements, the MA applicant must meet additional criteria based on their needs. For example, they must require a nursing home level of care, which means they typically must be evaluated by a public health nurse as part of what is called the MNChoices Assessment. And for MA-LTC or MA-EW, they must be 65 and older; or, for CADI they must be under 65.

These are just the most basic elements of eligibility and because every person’s situation is different, even though you or your loved one may meet these basic criteria, there may be other considerations before you or your loved one should apply. For example, you may be ineligible for benefits if the applicant or their spouse gifted assets within the last five years. There are also special asset limit rules for families that own small businesses or farms. If you are looking for more information about qualifying for MA, please contact me to discuss your situation.

My Spouse Needs Nursing Home Care -- Do We Need to Divorce?

When I am asked about nursing home care for married people, one of the questions that almost always comes up is this: “Do we have to get divorced?” Or, in a similar vein: “Should we get divorced?”

There is a misconception about long-term care that has been around for a long time, which is that a married couple should or must get divorced when one spouse needs care. It’s like an urban legend that just won’t die. And it adds unnecessary stress in a situation that is already very stressful for families. So, let me put it to rest once a for all:

No, you don’t need to get divorced.

And, most people shouldn’t get divorced.

Here’s why: If you need to rely on Medical Assistance (also known as “Medicaid”) to help pay for long-term care in a nursing home, assisted living facility, or at home, the program requires the ill spouse to spend their assets down to just $3,000. But the program also provides for a community spouse asset allowance that is much greater than that. This year, the community spouse asset allowance is $126,420, and the figure is adjusted annually based on the rate of inflation.

In addition, there are certain benefits to staying married. For example, the well spouse can remain living in the marital home, and the home will not be counted toward either spouse’s asset limit. The well spouse may also receive an additional income allocation from the income of the ill spouse if the well spouse’s income is too low, which is helpful in situations where the ill spouse was the primary earner and may be receiving a larger amount in pension or social security income. The well spouse may also be allowed to keep additional income producing assets if their income falls below a certain minimum threshold. Moreover, the program allows married couples to annuitize assets, converting available assets to an income stream for the well spouse, and the well spouse’s income is not required to be spent on care costs. So, for all these reasons, staying married is often more advantageous than getting divorced.

So, why does the myth that people have to get divorced persist? It may be because in some unique situations, divorce is the best option. For example, in a second marriage where the couple signed a prenuptial agreement, a divorce may provide for an appropriate redistribution of assets that better protects and provides for the well spouse. But these cases are generally rare and require the advice of a knowledgeable attorney to determine if divorce is appropriate. In most cases, divorce is simply not the best option.

If you or someone you knows is in this situation and is wondering what to do, contact an experienced elder law attorney for advice.