How Do I Stop Medicaid From Taking My House In Indiana?
Suppose Medicaid is paying your nursing home bills. As a Medicaid recipient, you’ve already demonstrated that you have low income and assets. You’ve already confirmed with Medicaid that you own a house. And Medicaid lets you keep your house while you receive benefits.
What you might not know is that Medicaid might attempt to take your house when you die. You might be surprised to learn that Medicaid has the legal right to do this in certain circumstances. The Medicaid planning attorneys at Hawkins Elder Law provide you with a brief rundown of how Medicaid can take your home through estate recovery and how our attorneys could assist you if you have questions relating to Medicaid planning.
What Is Medicaid Estate Recovery?
In Indiana, you could receive nursing home Medicaid benefits when you own a home. But there are strings attached. In the worst-case scenario, Medicaid will attempt to take your home when you die to recoup the benefits you received.
The state of Indiana uses a legal process known as estate recovery. If you received Medicaid benefits in Indiana, then after you die, the state uses estate recovery to take some of your assets to cover the benefits Medicaid provided to you, considering the medical expenses they paid after you turned 55 years old.
Your estate consists of all assets, including personal property and real property, that you own at your death. Assets could include a vacation home, money remaining in your bank account or nursing home account, money held in your trusts, whole life or universal life insurance policies with cash surrender values, and more.
What Assets Cannot Be Recovered By The State?
Some of your assets might not be reachable by the state, including property that you transfer to certain trusts, personal effects, life insurance proceeds that are paid to your beneficiaries, and assets that are provided to your surviving spouse, a child under 21 years old, or a child who is blind or disabled. If you are a married Medicaid recipient and your spouse survives you, the state will not seek recovery until after your spouse’s death. However, Indiana law prohibits estate recovery against the community spouse’s assets after their death.
Undue Hardships
Medicaid generally does not seek an estate recovery if the Medicaid recipient died and is survived by a beneficiary who is their or their spouse’s immediate family member, and it would be a “substantial and undue hardship” to the beneficiary. The beneficiary would have to apply for a hardship waiver within 90 days of the date of claim.
What Is A Preferred Claim?
The state of Indiana can file a claim against the estate of the Medicaid recipient. This is a preferred claim which means that the claim must be fully paid before other estate debts are paid. The claim must be paid before any heirs receive distributions. But the executor can pay certain expenses before satisfying the claim, including those relating to estate administration and the Medicaid recipient’s last illness and funeral. It is important to note that if the Medicaid recipient has a Miller Trust in place, the funds in that Miller Trust cannot pay the estate’s expenses.
How Long Does Indiana Have To Seek An Estate Recovery?
The state of Indiana can file a claim if the Medicaid recipient’s probate estate is open. So, if it is necessary to open an estate, an elder law attorney might delay opening the estate until after the estate recovery deadlines have expired.
Up until nine months after the Medicaid recipient dies, the state of Indiana could potentially pursue a recovery of assets that are not in the recipient’s estate (assets transferred during the Medicaid recipient’s life or after their death so that those assets would not be included in their probate estate). In some cases, the state may have a longer time, and there is no time limit relating to the assets that have not been reported to DFR’s FSSA Division.
What Is Medicaid Asset Protection? How Do I Protect My Assets From Medicaid In Indiana?
Asset protection involves using strategies to protect your assets – including your home – from counting against you for Medicaid purposes. With a skilled elder law attorney’s help, you could protect your home from being considered by Medicaid altogether. An attorney can also help you structure your real estate ownership to avoid any estate recovery.
How Do I Avoid Medicaid’s 5-Year Lookback?
With Medicaid’s five-year lookback period, Medicaid investigates transfers of your assets (including your home) to see if you sold them, gifted them, or transferred them for less than they were worth. If this happens, Medicaid can impose a penalty that essentially requires you to pay out of pocket for long term care for a specified period. For this reason, planning for Medicaid in advance makes a lot of sense.
Medicaid Lawyer In Indiana
To learn more about preventing Medicaid from taking your Indiana home, you should consult with an Indiana Medicaid planning attorney. Click here to learn more about Medicaid planning strategies in Indiana.
About The Authors
Jeff R. Hawkins and Jennifer J. Hawkins co-author this blog with Thomas E. Hynes, a lawyer admitted to practice in Pennsylvania, New Jersey, and Florida who has a background in estate planning and elder law. Jeff and Jennifer are Trust & Estate Specialty Board Certified Indiana Trust & Estate Lawyers and active members of the Indiana State Bar Association and the Indiana Chapter of the National Academy of Elder Law Attorneys (NAELA).
Jeff is a Fellow of the American College of Trust and Estate Counsel. He is also licensed in Illinois, a member of the Illinois State Bar Association, and a member of the Illinois NAELA Chapter.
More Information
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My dad and I share joint ownership of our house. He might need to go to the nursing home in the future. Does Indiana seek an estate recovery for every medicaid member or just those who enter a nursing home? Will Indiana seek an estate recovery if I am on food stamps and medicaid? Will I need to apply for a hardship waiver after my dad’s death?
A hardship waiver might be available if you live in the home after your father’s death. However, there may be some planning opportunities for you and your father to avoid estate recovery altogether. If you consult with and experienced elder law attorney, the attorney can assess the situation and advise you of each planning opportunity’s cost/benefit trade-offs. Our office is located at 999 N Section St, Sullivan, IN 47882. If it is convenient to visit our office, you can call 812-268-8777 for an appointment or use the https://www.hawkinselderlaw.com/contact-us/ dialogue to contact our staff about scheduling an appointment. If our office is not conveniently located for you, please let us know your location so we can help refer you to excellent elder law counsel in your area.
I’m putting my two sons on my debt free home and removing myself from my deed , I’m in good health as of now , if I need Medicaid assistance , will Medicaid be allowed to take the home from my two sons ?
Ms. Walls, please do not put your sons on the deed!
Two of unrelated clients transferred partial ownership of their properties to their respective children last year before they sought our advice. In each case, one of their children died during the parents’ lives, causing far more complex issues than the parents could have solved by adding their kids’ names to the deeds.
There is a much better way to protect your property from nursing home costs, and it is an especially bad idea to remove your name from the deed.
Please follow up us with us for more information by completing the contact form at https://www.hawkinselderlaw.com/contact-us/.
my father in law lives with us, we just sold his home and he will be going into a nursing home. the money from the sale of the house does that all have to go to the nursing home, or can he gift his kids anything before he goes into the nursing home? and can we pull some money for a funeral, he has no life insurance?
Please forgive this delayed response to your post. We’ve been busy dealing with the Indiana Family and Social Services Administration’s crazy overhaul of the Indiana Medicaid system since early July.
There are definitely things that he can do to protect some of the home sale proceeds with a thorough asset protection plan. We encourage you to download and use our documents checklist (https://www.hawkinselderlaw.com/wp-content/uploads/2022/03/Medicaid-Client-Checklist.pdf) and Medicaid Planning Questionnaire (https://www.hawkinselderlaw.com/wp-content/uploads/2022/03/Medicaid-Client-Questionnaire.pdf) to prepare for an initial conference. You can request a consultation with our Medicaid team by calling us at 812-268-8777 or contacting us through our contact form (https://www.hawkinselderlaw.com/contact-us/).
My mom just got Medicaid last year. However I want to sell her house and sell my house which she was a co signer on and purchase a house and move her in with me. Once she passes away and I want to sell that said house. Will Medicaid want the money from that ? Or is it better to put her house in a trust and keep her in her home? However once she dies and I sell her house how can I avoid repaying Medicaid for her expenses that they provided ?
You have more than one option. The details are too numerous to guide you toward your best solution through this chat, so please feel free to download and use our documents checklist (https://www.hawkinselderlaw.com/wp-content/uploads/2022/03/Medicaid-Client-Checklist.pdf) and Medicaid Planning Questionnaire (https://www.hawkinselderlaw.com/wp-content/uploads/2022/03/Medicaid-Client-Questionnaire.pdf) to prepare for an initial conference. You can request a consultation with our Medicaid team by calling us at 812-268-8777 or contacting us through our contact form (https://www.hawkinselderlaw.com/contact-us/).
My parents will probably need to go into a home. At the moment, stepdad refuses. My mom is on Medicaid and stepdad is a vet. I don’t know if he is on Medicaid. I really don’t want them to loose their home. What should I do. They made a will and put in there for me to have the house if they die. I’m not doing this to just be a gimme gimme. I own my own home. But they worked hard and I’d love to keep the home in the family. Thank you
It’s tough to watch loved ones’ health decline while they struggle to maintain their independence. Sometimes, all you can do is encourage them and be their support. We have a plan for married couples when it is not clear whether one or both will need nursing home care. A plan to transfer property doesn’t work in cases like you’ve described because the Medicaid transfer penalty could create a health care crisis for them.
We would be glad to discuss the matter with them if they are interested. Please feel free to download and use our documents checklist (https://www.hawkinselderlaw.com/wp-content/uploads/2022/03/Medicaid-Client-Checklist.pdf) and Medicaid Planning Questionnaire (https://www.hawkinselderlaw.com/wp-content/uploads/2022/03/Medicaid-Client-Questionnaire.pdf) to prepare for an initial conference. You can request a consultation with our Medicaid team by calling us at 812-268-8777 or contacting us through our contact form (https://www.hawkinselderlaw.com/contact-us/).
My sister and I were added to our Mom’s deed several years ago (5+ years ago) but our Mom’s name remains on the deed also. She is now to the point of needing 24/7 or extended care, whether it be in the home or a nursing home. She will be 100 on Thursday and is suddenly deteriorating health and we are looking at the next two months as a timeline to know how severe her condition is. Should we leave the home as is in the three of our names or remove her name now to secure the home?
Generally speaking, there may not be much you can or should do in this case. There are multiple ways your names and your mom’s name could appear on the deed. If her name appears with some form of the term “life estate,” you probably have the best possible situation. While it’s not ideal, “joint tenants with rights of survivorship” is not terrible. If the deed has neither of those terms, she might want to update the deed with a transfer on death deed for her retained share.
We would be glad to discuss the matter if you are interested. Please feel free to download and use our documents checklist (https://www.hawkinselderlaw.com/wp-content/uploads/2022/03/Medicaid-Client-Checklist.pdf) and Medicaid Planning Questionnaire (https://www.hawkinselderlaw.com/wp-content/uploads/2022/03/Medicaid-Client-Questionnaire.pdf) to prepare for an initial conference. You can request a consultation with our Medicaid team by calling us at 812-268-8777 or contacting us through our contact form (https://www.hawkinselderlaw.com/contact-us/).
There should be a bill presented that stops Medicaid from touching any assets, if you are a life long resident and have paid property, personal, and all the other taxes you pay on items you purchased during your lifetime. We as citizens should be able to keep and pass on to our children, not the government.
Glenda, many people share your thoughts. However, the Medicaid system uses taxpayer money to help people whose income and wealth can’t keep up with today’s high nursing home costs. The state and federal budgets would collapse if they paid those costs without requiring people to share some of their own costs. We see it as a balance in which our clients pay some of the cost and use the Medicaid rules to protect and pass some of their savings nd property to their families.