Can I Sell Home Owned Jointly with Mother Without Causing Problems With Her Medicaid?

Attorney Thomas B. Burton, of Burton Law LLC, in Eau Claire, Wisconsin is joined by Attorney Matthew Underwood, of Underwood Legal, LLC, in Madison, Wisconsin to answer a reader question about a home the reader owns jointly with her mother, while the mother is receiving Medicaid assistance to pay for her nursing home care. Attorneys Burton and Underwood discuss the facts of this situation and provide advice regarding steps the reader may wish to take before selling the home.



Transcript of Video: Can I Sell Home Owned Jointly with Mother Without Causing Problems With Her Medicaid?

Okay welcome back today I'm joined by

attorney Matthew Underwood who operates

Underwood Legal, LLC a boutique estate

planning and elder law attorney in

Madison Wisconsin so Matt thanks for

joining us

yeah thanks for having us and I'm happy

that I'm in the warm Caribbean here

while everyone else is doing the

coronavirus thing at home exactly it's

lovely to be here in the sunshine today

we're going to jump right into our first

question which is from Wisconsin and the

writer asks the following I am disabled

per social security I own a home with my

mother as tenants in common and we want

to sell it she has been in a nursing

home since April on Medicaid since May

and plans to move back to California

after the house is sold will this cause

any problems with Medicaid? So Matt

there's a lot there I'll hand it over to

you what do you think yeah so this is a

this is a good question and we get a

lot of people asking about how to

protect assets from long-term care costs

how can we use other benefits programs

out there like Medicaid to try to cover

some of those long-term care costs so

this question really touches on a

few of those issues so whenever we're

working with Medicaid or long-term care

issues I just you know can't caution

clients enough when going through this

the laws are very nuanced so we want to

make sure that we're being very careful

and really following all those laws or

you know could mean that some of that

protection we thought we were getting

can suddenly be removed or go away if we

do the wrong thing so I do recommend

that you know anyone attempting to do

this speak with the qualified elder law

attorney so you know kind of the basics

of this question though we're really

dealing with you know a house which is

an exempt

asset and exempt just means that if you

go to apply for Medicaid Medicaid isn't

going to consider that house to be one

of your assets if it's your primary

residence so in this case it looks like

mom who's in a nursing home she

was able to keep her house and still

qualify for Medicaid and really to

qualify for Medicaid you need to have

$2,000 or less so and what we can do

with the house is we can say that's an

exempt asset so it won't count towards

that $2,000 limit now the problem is going

to come into play when they attempt to

sell the house because what what selling

the house does is it converts that

exempt asset the house into a non exempt

asset which would be the cash so it

might mean that once that house gets

sold all of a sudden mom has too much

cash if she's over that $2,000 limit and

now she's going to be disqualified

so she wouldn't be able to qualify for

medicaid services

reimbursement until she would go back

under that $2,000 limit so there's a

there's a number of ways to get around

this if the goal is to sell the house

because you know they're moving out

of state or they don't need that

residence anymore we can do things like

you know taking the proceeds from that

sale of the house and putting them into

a special type of trust or pooled trust in

Wisconsin we have Wispact trusts so

there's ways that we can sell that

property but then we must do something

with that cash if we still want mom to

qualify for Medicaid on you know

some other options they could take that

cash and purchase a prepaid funeral