How Can I Protect My Home from Medicaid?

Attorney Thomas B. Burton answers the following question:

"How Can I Protect My Home from Medicaid?" Attorney Burton discusses how the Medicaid program works and how the Medicaid Estate Recovery program can seek repayment from your home after death if you pass away after receiving Medicaid benefits.

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Hello, I'm Attorney Thomas Burton and today's question is the following:

“How can I protect my home from Medicaid?”

Good question and this is one I see come up frequently, in my estate planning practice and this is a primary concern on many people's minds because often their home is one of their largest assets and one they worked hard to pay off over their entire life.

Now, you can apply for Medicaid and you can have a home up to worth $700,000 and change and you can apply and receive Medicaid services and that limit on the house changes a little bit each year. But for most folks, it’s around that 700-plus figure.

So, you can own the home, apply and qualify for Medicaid as long as you meet the other asset and exemption levels and in general per single individual you can have $2000 or less in your bank account and cash and other assets. For married couple, its higher, around 120,000, is the maximum but it depends on your specific asset level. So to get the exact number, you're going to want to work with an attorney.

However, to protect the home, it's an exempt asset for terms, in terms of qualifying for Medicaid, applying and qualifying. However, after you pass away, Medicaid will go after the home for repayment from your estate meaning whatever they paid on your behalf, they will put a lien against your house in the probate process to get repaid after you're gone.

So while you can own a home and qualify, they will want to get repaid from the home later. So if you want to protect your home from Medicaid in the state of Wisconsin, the best option now is to use an irrevocable asset protection trust to protect the home. Prior to August 1, 2014, the state of Wisconsin was not looking at houses that past outside of probate, for estate recovery, for Medicaid. So in those instances, sometimes, a regular revocable living trust would work, if the state did not look at assets outside the probate process but post-2014, this method no longer works. You're going to need an irrevocable Medicaid asset protection trust.

At my office, we help clients put together these type of trust but only after careful discussion and consideration about whether it's right for you and your situation. If you want to learn more about how these types of trusts work, I've created a free five step guide on how to protect your home from the nursing home and it's available on my website. I'll put a link in this video and all you need to do is click the link, go to the website, enter your email and the guide will be sent to your inbox. That'll go through the five steps you need to think about and how to set up this trust but in general, you set up an irrevocable trust and you place the home in the trust, 5 years ahead of the date, when you would need Medicaid services and you want to get to what we call the 5-year Medicaid look-back period after through those five years, the home is owned by the trust and Medicaid will no longer look back because it's outside the five-year look back period.

So great question about how to protect your home from the nursing home and thank you for asking.

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