Medicaid and Real Property: Don’t Let This Happen to You

When engaging in Medicaid planning and applying for Medicaid benefits, the old saying is true:  you get what you pay for.  Although it may be tempting to utilize the lower-cost services of a Medicaid agency instead of an Elder Law attorney, without proper legal guidance, it can cost you and your family tens or even hundreds of thousands of dollars.

Take this example:  Susan lived with her mother in the home she grew up in, which was in her mother’s name alone. Susan’s mother needed care in a nursing home and Susan hired a non-attorney Medicaid agency to handle the Medicaid application.  The Medicaid application was submitted and approved.  Good news, right? Wrong.  When Susan’s mother passed away two years later, Susan received a Claim Notice from Medicaid demanding payment in the amount of $250,000 – the amount Medicaid paid for her mother’s care.  Medicaid put a lien on the house, forcing Susan to either sell the house she planned to live in for the rest of her life or otherwise come up with $250,000.

In this case, Susan was entitled to the “caretaker child” exemption, meaning that the house could have been transferred to her free and clear since she lived with her mother for at least two years before her mother went into the nursing home.  The Medicaid agency did not know the law and Susan was incorrectly advised that as long as she lived in the home, it would be protected.  Susan now needs to sell the house or come up with $250,000 to pay back Medicaid. 

As is often the case, these costly mistakes are not discovered until it is too late.  Don’t let this happen to you!