Seniors want to live at home and independently and why not? In our experience, the most important and valuable asset is one’s home. So, how does one protect the home while also accessing Medicaid for long term care and a Reverse Mortgage for living expenses?

When meeting with seniors, one of the most valuable planning tools in our tool kit is the use of the Medicaid Asset Protection Trust.

Lenders have been unwilling to provide a reverse mortgage when the home is owned by this type of Trust, but we have just learned that at least one lender is willing to approve reverse mortgages even when the home is in this type of trust.

If the senior is uninsurable or can not afford the premiums of Long Term Care Insurance, then the only program available to pay for long term care is the Medicaid Program.

With the Medicaid Asset Protection Trust, seniors are able to place their home in the trust and still continue to receive all the benefits of ownership including the exclusive use of the home during their lifetime while accessing Medicaid. They have also taken a step to protect their home from estate recovery if they later need Medicaid nursing home care. Of course, the transfer will have to be greater than five years from the time Medicaid is applied for in order to be eligible for Medicaid nursing home care.

Now, if seniors need additional income to meet their living expenses, they will be able obtain a reverse mortgage and protect the home. It is very important to analyze if the reverse mortgage is the best choice for the senior before the senior takes this step.

For more information on these strategies, please contact Vincent J. Russo & Associates, P.C. at 1-800-680-1717. 

Thanks to Lynn Brenner of Newsday for her column, Ask the Expert.  On November 5, 2010, she responded to a question regarding how to protect mom's home if mom needs Medicaid nursing home care.

The daughter informed Ms. Brenner that her mother is 93 years of age, in failing health and her daughter has lived in mom's house since 1995.

I was privileged to be asked by Ms. Brenner to provide counsel on this matter.  In her column, I pointed out that the home is exempt for Medicaid eligibility purposes but subject to recovery when mom passes away.  There are specific rules that allow the home to be transferred to certain people or trusts without a Medicaid transfer penalty. These transfers are referred to as exempt transfers. This would avoid the Medicaid estate recovery upon mom's demise.

Lynn Brenner then went on to point out how this could be done and the importance of Advance Directives (such as the Durable Power of Attorney and Health Care Proxy) in the event mom lacks capacity to make financial and health care decisions.

The key is to act. The home is not protected simply because the daughter is a live-in-caregiver and hence an exempt transfer can be made to her.  The home must actually be transferred to the daughter while mom is alive.  If a transfer is made, there are also tax consequences that must be taken into account.

For the full article, go to www.vjrussolaw.com/teamrusso/latest-news

My mom is 93 and in failing health. She has fallen twice in the past, and recuperated after 100 days in a nursing home. I've lived in her house with her since 1995. Recently, I've had to enlist a live-in attendant to care for her. What are the rules governing house ownership if she has to go into a nursing home? I have her health-care proxy.

Your mother can take legal steps that will preserve...

 2010 Newsday Ask the Expert Nov 5