tidbit tuesday with Ben King medicaid basics

Save Your Home From Medicaid Estate Recovery (MERP)

There is so much bad information out there when it comes to Medicaid. I guarantee you have gotten some bad advice if you’ve asked enough people about Medicaid. And if you haven’t, you will.

One of the most common misunderstandings revolves around a person's house. I almost guarantee you’ve heard this one: "Momma can’t own a house and qualify for Medicaid." Another one I’m sure you have heard: "You have to get momma’s house out of her name or Medicaid will end up getting the house!"

Good news!

     1: Momma can keep her house and qualify for Medicaid

     2: Medicaid won’t get the house if you take the CORRECT steps now



An individual applying for Medicaid can have certain assets that will not count against their eligibility or Medicaid. One of those is a house. In fact, in 2020, you can have a house with an equity value of $595,000 that will not count against you, and still be eligible for Medicaid.

Not knowing this, many people are advised to transfer a house from a parent to a child. But the problem with that is that it may violate Medicaid’s gifting prohibitions and five year look back rule which could disqualify you from Medicaid. It also unnecessarily puts the house at risk because the house is now considered an asset of the grantee, and could be sold to satisfy the grantee’s debts if he faces financial difficulties. What was intended to save mom’s house may be the very decision that loses it.

Also, Medicaid doesn’t have to end up getting the house. Through the proper use of a life estate deed or Lady Bird Deed, you can ensure that the house isn’t lost to satisfy a Medicaid lien that exists against the Medicaid recipient’s estate.

If you, a family member, or someone you know has questions about Medicaid eligibility and you want accurate answers, the attorneys at Ross & Shoalmire will discuss your specific situation with you. Each person’s situation is different, so it is important to discuss your options with a Medicaid planning attorney

Ben King
Ben King helps clients in TX and AR with estate planning, asset protection, probate, and medicaid planning.
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