Estate Law Questions? Ask an Estate Lawyer.
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The retention of a life estate has a value to medicaid and when applying for medicaid benefits, even if she has not lived in the home, they can consider the value of that life estate. In order to transfer the life estate now, it would have to be reported to medicaid and it would be up to them or the court as to whether or not to include it. However, there is an alternative. The owner of the home where there is a life estate can file a petition in court to terminate the life estate based on her inability to use the life estate, which is a legal basis to terminate the life estate. If the owner terminates the life estate the court will exclude it from the 60 month Medicaid lookback period for benefits.
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It would be filed in the county where the house is located as it is real estate and the proper jurisdiction is the place where the land is located.