Despite Medicaid Transfer Restrictions, Some Transfers of the Home are Always Safe
The Home Can Sometimes Be Given Away Without Penalty Even After a Nursing Home Stay Has Begun
While many transfers of the home are subject to a period of disqualification from payment of nursing home costs by the state Medicaid program, some transfers can be made even after a nursing home stay has begun, and are immediately safe under federal law. (Other exceptions, especially in California, may apply under state interpretations of the federal law.)
One such permissible transfer is to the elder’s spouse. If one spouse becomes institutionalized, the home could probably be deeded to the spouse remaining in the couple’s home. This plan may not be very helpful to the family if the spouse who is institutionalized later receives the home back by will. Married couples that wish to have such action taken in case one of them becomes incompetent should have durable powers of attorney empowering each other to transfer the home.
Another permissible transfer is to (presumably reward) a child who spent no less than the 2 years immediately prior to the client’s institutionalization living in the client’s home and who took care of the client in the client’s home. The care must have been of the type which kept the client out of a nursing home. Since the state Medicaid program makes the decision as to whether these requirements were met, the child would be well-advised to keep detailed records during this period.
Another permissible transfer is to a child who is a minor or who is blind or disabled, or to an irrevocable for the benefit of a disabled child.
Finally, a transfer could also be made to a sibling who has an equity interest in the home and who has lived there for no less than one year prior to the client’s institutionalization; this exception could arguably apply if the client and sibling were co-owners of a multi-family home.
Even if the exceptions outlined above do not apply to the situation, in some cases there may be other steps that can be taken even after a nursing home stay has begun.