I am Going Into a Nursing Home: Can I Give the House to My Kids?
Florida elder law attorneys are frequently asked to help save the family home. For many seniors, their home is their largest investment and greatest asset, and in many cases there is no longer a mortgage on the property. Therefore, it only makes sense they would want to secure the asset, not only to provide for their own future but also as a potential inheritance for their children.
However, unless a person is very wealthy and can easily afford nursing home care for as long as needed, Medicaid assistance will usually be necessary at some point. But eligibility rules can make it difficult to qualify if the senior has large assets like a home. However, transferring the house to someone else can trigger a penalty period that eliminates the benefit of getting rid of the home. In short, seniors often find themselves in a catch-22.
Why can’t I transfer my house to a relative?
Florida Medicaid requires a person to prove that he is indigent in order to qualify for public funding for long-term nursing home care. This “indigent” requirement says that a senior must have less than $2,000 in total countable assets. In other words, there are a number of things that are not counted. But when it comes to assets that are counted, you can only have $2,000 worth of possessions. Therefore, in general a house would count and make you ineligible. Likewise, you can only have $2,199 in monthly gross income. The rules are different when there is a spouse who will remain in the community and not be admitted to a nursing home. However, one can quickly see why it may be tempting to just give the house to an adult child in order to qualify.
Is there any exception that lets me give my house to an adult child?
Actually, yes. Before going into a nursing home, Medicaid will look back five years to determine if you gave away an asset. If you did, then it will trigger a penalty period in order to make up for it. This can create a real problem. But there are some people you can give your home to and still avoid the penalty, including:
- Adult children (with exceptions);
- A spouse who is still living in the home;
- A child who is under age 21 or who is blind or disabled;
- A trust for the sole benefit of a disabled individual under age 6; and
- A sibling who has lived in the home during the year directly preceding the applicant’s admission to the nursing home who also already has an equity interest in the home.
So how do I transfer my house without triggering a penalty?
Under Medicaid rules, in addition to the people mentioned above, there is a “caretaker child” exception that allows you to transfer your house to an adult child who has lived in the home for the two years directly preceding your admission to the nursing home and who has provided substantial caregiver services to allow you to remain at home longer than you might have without the care. This can often be a great mechanism for keeping a house in the family. It can also be used to compensate an adult child who may have taken several years off from a career to help care for an aging parent.
In conclusion, the short answer is yes, you may transfer your home to an adult child, provided you satisfy all the exceptions. To determine what steps you should take to qualify and begin planning for long-term care, you should consult an experienced Florida elder law attorney at the Millhorn Elder Law Planning Group who can explain the complex Medicaid rules in further detail.