In general, for a married couple, if one of the couple needs long term care in a nursing home, the couple can engage in asset preservation planning that enables the couple to keep all of their assets and still get Medicaid to pay for the nursing home care. Included among the property that the couple can keep is the family home.
The matter can be complicated if, in addition to the family home, the couple owns a beach house. Specialized planning must be employed to protect the beach house.
For example, it may be possible to title the beach house in the name of the spouse at home, (not the nursing home spouse), and make it a rental property, if only temporarily. By doing so, the beach house can be characterized as a source of income for the spouse at home rather than being a countable resource which might cause Medicaid ineligibility. By doing so, the beach house would not be counted as an asset that would cause Medicaid ineligibility.
Another strategy can be employed where the beach house is owned with others. If a joint owner provides an affirmative declaration that he or she would refuse to participate in a sale of the property, then the property can be valued at zero for Medicaid eligibility purposes. Done properly, such strategy would pave the way to allow for Medicaid eligibility.
A third possibility is to list the property for sale. As long as the property is listed for an asking price that Medicaid will consider to be “fair market value,” if no offers to purchase are received, then the beach house can be valued at zero. For example, if the family owns a beach house that is in poor condition, and it is listed for sale at its assessed value, if no third party would be willing to pay that amount in light of the condition of the property, then this strategy may be employed to protect the beach house.
There are other strategies that may be employed, as well. The bottom line is this: don’t be dissuaded if you are faced with a challenging circumstance that complicates your Medicaid asset preservation plan. It still may be possible to engage in planning to preserve all of the family’s assets and get Medicaid to pay for care in the nursing home.
William M. Gatesman specializes in “thinking out of the box” to come up with creative solutions to assist clients with their asset preservation objectives.