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Will I Lose My House if I go to a Nursing Home?


Transcript:

hey guys Mike Frontera here back with

 another retirement Theory video so Mike

 

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 what happens to my home if I need

 long-term care does Medicaid take it

 

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 this is a question I get with some

 regularity and like many things legal or

 

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 financial the answer depends on a few

 crucial factors so I'm gonna go over

 

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 these factors and some things that you

 can do ahead of time to protect your

 

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 home now before we delve in a quick

 caveat I'm not an attorney state laws

 

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 vary considerably and nothing I am about

 to discuss is legal advice okay and

 

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 today we're only dealing with your

 primary home I'm not addressing the

 

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 protection of any other assets during a

 long-term care need in this video so

 

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 let's start out with some good news that

 is if you are receiving Medicaid and you

 

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 are still living your home will

 typically not be sold to pay for your

 

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 care while most of your other assets

 must be spent down in order to qualify

 

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 for Medicaid your primary residence is

 an exempt asset an important little

 

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 asterisk though is that when you enter a

 nursing home you must provide them with

 

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 a written statement that declares your

 intent to return home at some point the

 

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 neat thing is that your spouse will also

 not get kicked out of your home after

 

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 you pass away so if you have no kids and

 you don't care what happens to your home

 

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 after you're gone you can probably stop

 watching but it is good cocktail party

 

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 fodder so you might want to watch anyway

 okay

 

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 then when would Medicaid typically force

 the sale of your home well if you're

 

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 single or widowed and your receiving

 assistance it would happen after you

 

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 pass away and if you're married and

 receiving assistance it is a bit more

 

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 complicated again assuming you have

 declared an intent to return home and

 

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 either you or your spouse is still

 living estate recovery typically does

 

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 not occur once you have both passed if

 your spouse hadn't

 

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 received Medicaid assistance than a state

 recovery on your home is only done

 

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 sometimes and only in some states now if

 both of you have received Medicaid

 

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 however then recovery through a forced

 sale is more likely so for people who

 

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 want their home to pass to their heirs

 someday there is then some risk of an

 

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 eventual forced home sale should they

 receive Medicaid assistance so what are

 

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 some things that can be done to reduce

 that risk okay let's start with the

 

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 solid ones if you leave your home to

 your child who's under age 21 or to a

 

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 child who is blind or disabled States

 will not go after it at least under

 

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 current law that's something that

 probably still won't help a lot of

 

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 people the next one's a bit tougher if

 you have a child who lives with you and

 

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 has lived there at least two years prior

 to you needing nursing home care and

 

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 they can show to the state to their

 satisfaction that they kept you out of a

 

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 nursing home longer because of their

 help then Medicaid may not try to

 

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 recover the home from them after your

 death for those with no children living

 

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 at home you may want to see if your

 state allows recovery from both probate

 

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 and non-probate assets in those that do

 not simply having your home passed

 

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 outside the scope of your will in thus

 outside of probate could do the trick so

 

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 let's look at three ways to do that

 because in many cases avoiding the time

 

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 and expense of probating your assets in

 your will is beneficial enough to do

 

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 anyway so one way to have your home pass

 outside your will would be placing it in

 

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 a revocable living trust now it's

 important to note that a living trust is

 

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 one where you typically retain full

 control of the asset these trusts are

 

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 not the same as irrevocable trusts and

 are often established to hide assets to

 

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 qualify for Medicaid sooner that's an

 irrevocable trust okay

 

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 another technique that can work to move

 your home outside of your estate is

 

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 setting up something called a ladybird

 deed now currently ladybird deeds are

 

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 only allowed in five states Florida

 Michigan Texas Vermont and West Virginia

 

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 a ladybird deed basically names

 beneficiaries to your home but you still

 

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 have the right to live there and control

 the property it doesn't create a five

 

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 year look-back period for Medicaid

 eligibility and it has the potential in

 

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 keeping the home in the family in those

 states that allow it a more common

 

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 version of this is what's called a

 transfer on death deed a transfer on

 

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 death or a Tod deed can be another

 relatively easy way to have your home

 

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 passed outside of your will these Tod

 deeds are available in a lot more than

 

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 five states but not every state so the

 caveat here is that just because you can

 

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 set one up in your state does not

 necessarily mean it will protect your

 

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 home from Medicaid estate recovery some

 states as I said before allow for these

 

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 deeds but we'll go outside of your

 probate estate in their recovery efforts

 

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 finally you could consider whether it

 was worth transferring your home to an

 

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 irrevocable trust this would have the

 effect of removing your home from your

 

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 possession for Medicaid purposes in fact

 many other assets could go in there as

 

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 well like investments in cash and may

 keep them from having to be spent down

 

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 during your lifetime in order to qualify

 for Medicaid but doing this could

 

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 subject you to a five-year look-back

 period for Medicaid eligibility meaning

 

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 if you needed care within five years of

 making this transfer you may have a

 

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 period of ineligibility to satisfy

 before benefits were available in fact

 

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 there are a number of drawbacks but also

 significant opportunities to these

 

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 irrevocable trusts but that is starting

 to get way out of the scope of this

 

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 video so we'll save it for another time

 now if you've been listening very

 

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 carefully you might have noticed that

 how

 

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 many qualifier words I've said here a lot

 of mights and mays and under current law

 

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 it's because these laws are continually

 in a state of flux and what worked today

 

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 may very well not work tomorrow and

 because laws and enforcement of these

 

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 laws varies tremendously between states

 so let me finish with this reminder if

 

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 this stuff's important to you I

 encourage you to visit within an estate or

 

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 elder law attorney early on and review

 your plans with them regularly if you

 

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 want to find out more about working with

 me come visit me at www.retirementtheory.com

 

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 or give me a call at (518) 667-2022. Did you hit the subscribe button or follow me on Facebook I think that you should You'll stay up to date on my videos on all things retirement planning once again thank you for joining me see you next time

 


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