Can I protect the family home from being used to pay for nursing home care?

Serving Waukegan, Libertyville, Lake County, Gurnee & nearby areas of Illinois

We are frequently asked by elderly homeowners and their families whether there is anything they can do to prevent their house from being sold to pay for expensive long term care in an assisted living facility.  In general, Medicaid will not pay for such care until it can be demonstrated that the patient is insolvent.  Many people attempt to have their parents deed the house to them to try and keep the home and its value in the family.  However, Medicaid has a 5 year look back rule and can void any transfer made during that period which appears to have been completed with the intention of defrauding Medicare of assets to which it would otherwise be entitled.

There are exceptions to these rules.  When one spouse is in a nursing home, the other spouse can continue to stay in the home and Medicaid will not force a sale in most instances.  It helps if the person in long term care states a desire to return to the family home at some point.

If a child acts as a caregiver, the parent(s) can deed the home to the child and avoid having the home sold to pay for long term care.  However, the child must have been provding care for at least 2 years and lived in the home as their primary residence for at least 2 years prior to the deed being signed.

The bottom line is that the children of elderly parents should not assume that they are entitled to an inheritance just because the family owned a home.  An elderly person who requires long term care and does not have insurance or other means to pay for it should expect to use all of their assets for that care in most instances and regretably will not be able to leave much for their heirs.  Be careful to avoid asset transfers intended solely to hide them from Medicare as you don't want to create liability for violation of federal laws.

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