As we begin to age, we start to think about those end-of-life decisions such as wills, long-term healthcare, and other estate planning matters. But while making these decisions can be incredibly important when setting yourself up for success down the road, some of these decisions can actually affect your eligibility for Medicaid as well.
Let's first look at your estate, more specifically your home. If you own a home, you may be considering selling it or giving it to a beneficiary. If you plan on selling it, you'll want to consider whether the profit you get in return could affect your Medicaid eligibility. Because of how Medicaid eligibility is calculated, the sale of your home could be considered additional income and disqualify you from your benefits.
If you plan on giving it to a beneficiary, you'll want to consider how you do so. For Medicaid eligibility, a person's primary residence is not counted for purpose of Medicaid eligibility. If you transfer your home to a beneficiary, it may make you ineligible for benefits. If you instead execute what is called an enhanced life estate deed, or Lady Bird deed, you can not only pass on your property to a beneficiary but not have it count against Medicaid eligibility.
It's also important to consider when you give away your things to family members as well. Medicaid has what is called a "look back" period, which requires you to disclose any and all things that you have given away in the past few years. Although this property is not in your possession anymore, it can still count against Medicaid eligibility.
Because we couldn't answer every question about property and Medicaid eligibility in this post, our readers are always encouraged to seek legal representation for their specific situations. This is especially true if they feel they have run into problems with Medicaid eligibility because of their estate plan.
Source: Nolo.com, "Lady Bird Deeds"