I am aware of the Homestead exemtion. How does this apply…

This is probably one the most commonly asked questions elder law attorneys are asked. When applying for Medicaid benefits, the homestead is considered exempt and protected if a spouse or dependent relative continues to reside in the home; or the individual (or, on his or her behalf, a designated representative) states an "intent to return" home.

The homestead will remain exempt during the lifetime of the applicant if the above criteria is met, and will NOT be subject to Medicaid claims at death if there is a surviving spouse, or dependent who is at home, or "heir."

However, what if there is no well spouse, dependent or "heir" and what if the well spouse predeceases the nursing home spouse? In this often overlooked scenario, the homestead may very well become subject to Medicaid claims at the nursing home spouse's death.

Another common scenario is where Mom is about to enter a Nursing Home, is a widow, owns a home and has one or more children. Often times Mom will gift (quitclaim deed) the property to the children in the hopes of preserving and protecting it from Medicaid. However, what happens is that Mom has made an uncompensated transfer and a penalty period will result. For example, if Mom transfers a $99,000 Condo to son, a 30 month penalty period will result whereby Mom will be ineligible for Medicaid benefits. This is a very common mistake made. Not only is Mom now disqualified for a period of time, but she has lost the valuable Property Tax and Constitutional Homestead protections.

So a spouse needs to be living there at the time of death. If the house is sold before death, then the proceeds can be subject to Medicare, but if sold after death, so long as at death it qualified as a homestead, it will continue to be exempt.

Hope that clears things up a bit. If you have any other questions, please let me know. If not, and you have not yet, please select the "accept" button. If you have already clicked "accept", or if you will in the future, please let me know so I can track these for my own reports and customer satisfaction stats. Thank you, XXXXX XXXXX good luck to you!

In most states, transferring your house to your children (or someone else) may lead to a Medicaid penalty period, which would make you ineligible for Medicaid for a period of time. There are circumstances in which it is legal to transfer a house, however, so consult an attorney before making any transfers. You may freely transfer your home to the following individuals without incurring a transfer penalty:

• Your spouse


• A child who is under age 21 or who is blind or disabled


• Into a trust for the sole benefit of a disabled individual under age 65 (even if the trust is for the benefit of the Medicaid applicant, under certain circumstances)


• A sibling who has lived in the home during the year preceding the applicant's institutionalization and who already holds an equity interest in the home


• A "caretaker child," who is defined as a child of the applicant who lived in the house for at least two years prior to the applicant's institutionalization and who during that period provided care that allowed the applicant to avoid a nursing home stay.

While you can sell your house for fair market value, it may make you ineligible for Medicaid and you may have to apply the proceeds of the sale to your nursing home bills.

So if someone is not able to live there under the homestead exemption, but rather it has to be sold, if it does not fit into these categories, selling it for free market market value may make one ineligible for Medicaid and might have to apply the proceeds to nursing home bills.

I know this is probably not what you wanted to hear, but it's the law. I hope that clears things up anyway. If you have any other questions, please let me know. If not, and you have not yet, please select the "accept" button. If you do click "accept", or if you will in the future, please let me know so I can track these for my own reports and customer satisfaction stats. Thank you, XXXXX XXXXX good luck to you!

It's actually medicaid that would likely put a claim on the proceeds, if none of the exceptions apply.

It would probably just remove a portion of the debt to them.

Especially now that she's already on Medicaid and in a nursing home. Otherwise, it could have the effect of denying her Medicaid.