1. Why should I take steps to protect my home? If you suffer a long term illness and you have not taken steps to protect your home, your home may have to be sold to pay for your care.
2. If I put my house into my child(rens) name(s) will I lose my STAR/Veteran’s exemption? Yes, unless you retain a life estate, which is the right to live in the house for your lifetime
3. What if I put my home in a trust? As long as the trust provides you the equivalent of the life estate, your tax exemptions should be preserved
4. If I need nursing home care, will Medicaid take my home? Yes, unless you have an intent to return home, or your spouse lives in the home, then Medicaid considers the home an “exempt” asset and cannot take your home, make you sell it or place a lien against it.
5. If my spouse needs nursing home care, can I still protect my home? Yes, as long as one of you lives in the home, Medicaid considers the home an “exempt” asset and cannot take your home, make you sell it or place a lien against it. However, you need to be aware of Medicaid estate recovery in the event you predecease your spouse.
6. What is the best strategy to protect my house from a nursing home if I am
planning in advance? Generally speaking, a Medicaid Asset Protection Trust, which is a type of irrevocable trust, offers the best protection, for you and for your family.
7. If my home is in my child(ren’s) name(s) or in a Medicaid Asset Protection Trust, can I sell it? Yes, however, if your home is in the name of your child(ren), you will need their approval and permission to sell your home. If your home is in a Medicaid Asset Protection Trust, you will need the Trustee(s) approval to sell your home. However, in the MAPT you will have the right to change Trustees so that if your current Trustee(s) do not agree, you can appoint new Trustee(s) to sell your home. You will also need to look at possible capital gains tax issues.
8. If I am not married, is there any way to protect my home in the event I need long term care in the future? Yes, as a general rule, you would need to take the home out of your name 5 years before needing nursing home care to protect it.
9.What if I have not transferred my home and I need Medicaid? There are a handful of exceptions to the 5 year waiting period. For example, you can transfer your home to a “caregiver child” (a child who has lived with you for at least 2 years immediately prior to your needing nursing home care and has provided care to you at home); a disabled child; or to a sibling who lives in the house for at least one year and who has an equity interest in the house, and that transfer will not create a waiting period for Medicaid eligibility.
10. If I need care at home, can I protect my home from Medicaid? Yes, your home is exempt (there is an equity limit in some instances) as long as you live there. However, it would be prudent to discuss options on taking the home out of your name in the event you were to then need nursing home care or to die.
11. Can I get a reverse mortgage if my home is in my children’s names or in a MAPT? If your home is in your children’s names and you have a life estate, you should be able to get a reverse mortgage; however, your children will need to apply with you. If the home is in a MAPT, you may still be able to obtain a reverse mortgage
12. If I am on Medicaid, does Medicaid get paid back when I die? Yes, Medicaid is a creditor against your “estate”. However, in New York, Medicaid estate recovery is limited to your “probate estate”. Therefore, with proper planning to avoid probate, your estate can escape Medicaid estate recovery.
Note: These answers are informational only, based on New York law and are not to be considered legal advice.