Before starting Medicaid planning, it is natural to worry if you must give up the family house to qualify for assistance with paying for nursing home care. This is an understandable concern for senior couples where one spouse is not moving into the assisted care facility and for those who want to pass on the house to their children as part of their estate plan.
The Medicaid program in Massachusetts, known locally as MassHealth, will not seize your house, kick out your spouse, or force you to sell. But the agency might put a lien on the house for the value of what it spent on nursing home care. The lien would come into play if you ever sell the house, in which case MassHealth would seek reimbursement of the lien. The agency must seek repayment under the commonwealth’s estate recovery program, which takes action after a recipient who lived permanently in a nursing home or similar facility passes away.
Methods for keeping your house while qualifying for Medicaid
The law provides strategies to keep your home within your family and let you (or your spouse) live there while still qualifying for Medicaid assistance. One popular solution is to place the home into trust. Various trusts exist that let your family have full use of the house while shielding it for Medicaid qualification purposes. Other strategies include:
- Gift the house to your children or other intended heir during your lifetime. However, this can have significant tax consequences for the recipient, and you generally must do this at least five years before applying for Medicaid to avoid the look-back period and possible penalties.
- Use a “Lady Bird deed” to transfer ownership to another party while retaining life estate rights.
The sooner you begin Medicaid planning, the easier it can be to find solutions to problems like keeping your home. But there are always options, no matter your age and health. An attorney with experience in this area of the law can explain your options.