A common misconception in Elder Law: “We’ll have to sell mom and dad’s house to pay for the nursing home.”
It seems like the first thing everyone wants to do when a loved one needs long-term nursing care is to sell their house. They listen to friends, neighbors and pundits on television who tell them that you need to sell the house and use the proceeds to pay for the nursing home care. The fact is, though, selling the person’s home may not be the best option.
Generally, a Medicaid applicant’s house is exempt. This means that, when the Department of Public Welfare (“DPW”) looks at their resources, they will ignore the house and its entire value. The only requirement for this exemption is that the applicant intend to return to the house upon their release. This is certainly the case for a majority of nursing home patients. The home exemption is particularly beneficial when a community spouse is involved. When a wife needs long-term care, her husband still needs a place to live. The exclusion allows the husband to stay home while ensuring his wife is cared for appropriately.
When a Medicaid applicant’s house is sold, it is no longer exempt because it is transformed into a cash asset. Selling a house could seriously jeopardize a nursing home patient’s Medicaid eligibility. Many well-meaning individuals have sold their parents’ homes thinking it would help them qualify for benefits, when in fact, it made them ineligible.
What about when the house is too much for the husband to handle? It is often the case that when one spouse enters a nursing home, the other wants or needs to downsize to a smaller home. In such circumstances, it may make sense to sell the house and use the proceeds towards purchasing a new one for the community spouse. Buying a new home with funds from the sale of the old one is tricky business and a wrong step could lead to ineligibility.
There is only one universal piece of advice when it comes to knowing whether you should sell or keep a home when someone enters a nursing home – talk to an elder law attorney. The experienced Elder Law attorneys at McMorrow Law, LLC can help you avoid harmful missteps and guide you through the confusing Medicaid process. Call the office today at 724-940-0100 for your free 30 minute consultation.