When a nursing home stay becomes unavoidable, many elderly residents of New York believe they can rely on Medicaid. They spent down their assets as they were told — incorrectly, it turns out — that they needed to do before they would qualify for Medicaid assistance. Unfortunately, qualifying for Medicaid benefits and protecting assets — including one’s personal home — is a lot more complex than most people expect, which is why many turn to a New York Medicaid planning attorney for assistance.

The basic premise of Medicaid is that individuals are expected so spend down their assets until a bare minimum remains, at which point they supposedly will qualify for Medicaid. While there are certain excludable or exempt assets, such as a single vehicle, most assets are countable. The rules determining how much individuals can have in countable assets before exceeding limits for Medicaid coverage are very complex indeed, with lengthy formulas that vary depending on whether they are married, single, or whether one or both partners are in a nursing home.

Possibly even more confusing are the limits on equity value and title stipulations for a home to be exempt. With an attorney’s help and the proper documentation, there are ways to protect exempt assets and various types of transfer on death deeds. One such example, known as a “ladybird deed,” allows the individual to stay in his or her home while living, but transfers ownership to designated beneficiaries after death without going through probate. Avoiding probate is especially important because, though a home is exempt while the individual is on Medicaid, if it is titled solely in that individual’s name, then after his or her death, it becomes subject to Medicaid estate recovery when it goes through probate.

These are only a few of the complex and varied examples of the way Medicaid rules can affect an individual’s assets and home, and the home exemption rule has a variety of exceptions. Often, elderly individuals believe they are ready to apply for Medicaid, thinking that their home is exempt, only to discover that they are ineligible and end up with considerable nursing home bills. An experienced New York Medicaid planning attorney can offer insight into these complex legal issues to help with asset protection and more.

Source: thetimesherald.com, “Protecting your house when you qualify for nursing home medicaid“, Matthew Wallace, March 20, 2017