1-888-368-4329Nursing Homes Pressuring for Sale of Residents’ Homes
Preventing a nursing home from trying to force the sale of a resident's home is one reason it is important to have a properly drawn and comprehensive durable power of attorney and health care proxy—in addition to a last will and testament.
When a nursing home resident has neither long-term health care insurance (LTHC) for custodial care, nor a health-care proxy along with a durable power of attorney, a nursing home may petition the court for the appointment of a guardian. This guardian is empowered to make the resident’s financial decisions when the resident is no longer able to make such decisions.
Nursing homes often pressure court-appointed guardians to sell a residents' homes by petitioning the court to force its sale to pay the nursing homes costs before qualifying the resident for Medicaid benefits. This happens despite the fact that a resident’s home is generally an exempt asset for Medicaid qualification purposes.
Nursing homes profit when residents sell before they qualify
Nursing homes want the sale of residents’ homes because when a resident’s home is sold prior to the resident’s Medicaid qualification, the nursing home is paid at the nursing home’s private pay rate—approximately one-third higher than the Medicaid reimbursement rate—until the proceeds from the sale are spent down for Medicaid qualification purposes ($2,000 in liquid assets).
If the resident's home is not sold, after the resident dies the amount due to Medicaid for estate recovery and Medicaid reimbursement is significantly less than the amount the nursing home gets when the home is sold before Medicaid qualification. It could be the difference of the nursing home resident having no assets to leave to heirs or leaving heirs the balance of the proceeds of the real property after Medicaid has been reimbursed for the benefits paid.
Medicaid cannot force a home's sale
Medicaid cannot force the sale of the resident’s home in order to qualify the resident for Medicaid. Medicaid may put a lien against the real property for the benefits received by the recipient. But, Medicaid cannot collect reimbursement of the benefits until after the deaths of the resident and the resident’s spouse and until the resident’s children have all attained the age of 21 years.
There are four exempt categories for the transfer of the resident’s home without a Medicaid penalty period, when transferred to a resident's—
- Spouse
- Child under 2, or who is blind or permanently and totally disabled
- Sibling who has equity in the home and was residing in the home for at least one year immediately before the date the individual was institutionalized
- Child who was residing in the home for at least two years immediately before the individual was institutionalized and who (as determined by New York State) provided care to the individual that permitted him or her to reside at home rather than in an institution.
Avoid penalties. Talk to a lawyer
A nursing home resident should not have the nursing home’s attorneys give the resident Medicaid or estate planning advice as the nursing home’s attorneys have a potential conflict of interest as attorneys for a creditor of the resident, the nursing home.
NYC estate planning and Medicaid lawyer
We serve clients from New York City (Manhattan, Bronx, Brooklyn, Queens), Westchester, and Nassau and Suffolk Counties. To set up a free consultation with an attorney regarding elder care law, Medicaid or estate planning, contact Cormac McEnery at 1-888-368-4329.
