If your spouse or your parent are of the age where it might be necessary to move into a nursing home, then you need to consider how to protect the home. Nursing homes are very expensive. If you have not planned accordingly, your home might be considered an asset and Medicaid might want to take it from you.
Placing someone into a nursing home is a complicated experience, and you don't want to have the frightening thought of losing you or your parent's home further exacerbate the matter. That's why its important to understand the basic concepts involved and then speak to a qualified financial adviser.
Can't the House Be Signed Over to Avoid Medicaid Reimbursement?
No, at least not in a timely manner. There is a term you need to be familiar with: lookback. The lookback period is a length of time when Medicaid can "look back" and consider the property still yours, and it will still be considered an asset. The lookback period is often used for cash assets, transfer of stock, and other things, but it also applies to the house. The term is 5 years. Any transfer of stocks, bonds, and other monies during this period could still be counted when Medicaid seeks reimbursement.
For example, if your parent is planning on entering a nursing home this year, and they transfer their house to you, it would still be considered a viable asset.
There are specific instances when a house cannot be considered an eligible asset. If the adult children have been living in the house for a number of years, or if the spouse is still alive and living in the house, then the house would not be considered eligible.
Two Alternatives: Insurance and Trusts
One popular method of avoiding high nursing home costs is long-term care coverage. This is a special type of medical insurance that will cover nursing homes. However, some people choose not to purchase this insurance, and they instead opt for a trust.
A popular method of getting around the Medicaid reimbursement issue is to set up a living trust. The person who is planning on going into the nursing home will transfer their assets and no longer be considered to be in possession of them. The children can be named as beneficiaries.
It is important to contact a financial advisor who specializes in creating trusts. You don't want to print out a document from the Internet and fill it out yourself. These are complicated legal documents.