My wife is going into a nursing home as private pay and she has a three-years-long-term-care policy. Eventually she may have to go on Medicaid. I heard that Medicaid can take our home for reimbursement when she passes. Is this true?
Maybe. South Carolina like all states has estate recovery which means the State can place a creditor’s lien on real and personal property after a person age 55 or older that lived in a nursing home dies and their estate goes into probate. The purpose of this program is to attempt to recover the amount paid on behalf of the person for health care under the Medicaid program. Medicaid is a combination of state and federal tax payer dollars and while we want to help families in need, these programs eat up a huge portion of our fiscal budgets and recovery ensures these programs will be available for the next wave of persons in need.
One exception to estate recovery is to transfer the home solely into the name of the community spouse, which can be accomplished if your wife is still competent to execute a deed. If she is not competent, then the transfer could be done through a pre-existing financial power of attorney with gifting powers or via a probate court proceeding.
There may be other ways to avoid or reduce estate recovery all together. You need to consult now with an elder law attorney well versed in Medicaid asset preservation on your specific fact situation. As you may know there is a five-years-look-back period for Medicaid so the long term care policy your wife has will not cover the entire look-back period. Don’t wait until the long term care policy funds are depleted or rely on any earlier estate planning you did as a couple. The facts have changed dramatically and your old estate plan may be wholly inadequate to address your family’s current needs and goals, including any joint tenancies and certain life estates you or your wife may have created.
You should also ask your attorney about possible VA pension benefits, also known as Aid and Attendance funds, you or your wife might be entitled to now or in the future.
The consultation fee with your elder law attorney could be some of the best money you ever spent and should give you peace of mind regarding your financial future.