Plan Ahead for Medical Costs, or Medicaid Could Take Your Home

Qualifying for Medicaid when you need it isn’t exactly easy. There is an extensive review of your financial circumstances involved. Any current income and the assets you own can affect your eligibility.

Your house is usually one of the few pieces of property you can possess without disqualifying yourself for benefits. In fact, your current financial circumstances aren’t the only ones that matter. The state will look back at your financial records to make sure you haven’t conducted any large transfers of property in the recent past.

Medicaid planning can make it easier for you to get benefits when they become medically necessary. Careful planning can also help protect your assets from claims by creditors after you die, including the New York Medicaid recovery program.

What is the New York Medicaid recovery program?

Medicaid is based on financial need, and the state expects those who receive benefits to have already used all of their own personal resources for their care. There are limits on what you can earn while receiving Medicaid as well, meaning that you aren’t in a position to accrue new assets.

When you die after receiving care through Medicaid, the state will try to recover whatever it paid for your care from your estate. If you have any money in the bank or any personal property that your executor liquidates, Medicaid can make a recovery claim against those estate assets.

Even the home that didn’t prevent you from getting benefits before is suddenly at risk. Medicaid can take your home, even if you had hoped to leave it for your children. Only in specific circumstances involving dependents or spouses living in the home will the state delay claims against your house.

How can you protect your home from Medicaid and other creditor claims?

The easiest way to avoid either Medicaid or other private creditors making a claim against your home after you die is to take your name off of the deed. Your name on the title is what requires your home to pass through probate as part of your staying and therefore what gives creditors and Medicaid recovery program that opportunity to make a claim against it.

By arranging your ownership papers so that the deed transfers automatically to someone upon your death, you can keep your home out of probate. Transferring ownership of the property to a trust while you are still alive is another way to protect it from claims by Medicaid recovery.

The more you understand about how Medicaid works, the easier it will be for you to get the benefits you need and protect your assets as you age.