Full question:
As my mother's primary caregiver, if she would have to be put in a nursing home, I live in her home. Would I lose the right to live in her home (which she owns) if she was admitted on Medicare?
- Category: Medicaid
- Date:
- State: New Jersey
Answer:
The look-back period for asset transfers has been extended from three years to five years. This means that when a person applies for Medicaid, the state will review the previous five years to check for any asset transfers made for less than fair market value. If such transfers are found, Medicaid may impose a penalty period during which the person is ineligible for benefits. This penalty period starts either on the first day of the month after the assets were transferred or when the person is eligible for Medicaid, whichever is later.
In general, Medicaid eligibility requires that the elderly person has limited assets. Transfers made with the knowledge of an impending Medicaid claim may be considered fraudulent. Under the Uniform Fraudulent Transfer Act, a transfer is fraudulent if made to hinder or defraud creditors or if the transferor did not receive equivalent value and was about to incur debts beyond their ability to pay.
Notably, certain transfers do not affect Medicaid eligibility. For example, transferring a home to a spouse, a child under twenty-one, a blind or disabled child, a sibling with an equity interest who lived in the home for at least one year before institutionalization, or a caretaker child who provided care for at least two years before institutionalization is permissible.
If the equity interest in the home is $500,000 or less (or $750,000 in some cases) and the person intends to return home, it will not count as a resource for Medicaid eligibility. However, creating a life estate without the power to sell the house may disqualify a person from Medicaid. If the life estate is created without the power to sell and was established long enough ago to avoid penalties, it may still be considered a countable resource.
In summary, if you are a caregiver and have lived in your mother’s home, you may not lose the right to live there even if she goes into a nursing home, provided certain conditions are met regarding asset transfers and home equity.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.