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Medicaid’s Treatment of the Home in 2015

Posted by Aubrey Carew Sizer | Oct 28, 2015

Nursing home residents do not automatically have to sell their homes in order to qualify for Medicaid. In some states, the home will not be considered a countable asset for Medicaid eligibility purposes as long as the nursing home resident intends to return home; in other states, the nursing home resident must prove a likelihood of returning home.

But principal residences are not counted as assets by Medicaid only to the extent the applicant's equity interest in the home is less than $560,000, with the states having the option of raising this limit to $840,000 (figures are adjusted annually for inflation; these are for 2017).

The equity value of the home is the fair market value minus any debts secured by the home, such as a mortgage or a home equity loan.  For example, if your home has a fair market value of $400,000 and an outstanding mortgage of $100,000, the equity value is $300,000.

But your equity interest depends on whether you own the home by yourself or with someone else.  If you own the home by yourself, your equity interest is the entire equity value.  If you own your home jointly with your spouse or someone else, your equity interest is only half of the home's equity value.

The home equity rule does not apply if the Medicaid applicant's spouse or a child who is under 21 or is blind or disabled lives in the home. But the home may be subject to estate recovery after the Medicaid recipient's death, again depending on the state.

Posted on: October 28, 2015

About the Author

Aubrey Carew Sizer

Aubrey Carew Sizer, Esquire, is the Principal Attorney of The Law Office of Aubrey Carew Sizer PLLC, a Northern Virginia law firm providing representation for Wills, Trusts, and Estate Planning, Long-Term Care Planning, Guardianship and Conservatorship, Special Needs Planning for the Disabled, and Probate, Estate and Trust Administration.

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The Law Office of Aubrey Carew Sizer PLLC provides customized and affordable estate planning (including wills, living trusts, powers of attorney, and advance medical directives); elder law services (including long-term care planning, special needs planning for the disabled, and guardianships and conservatorships); probate, estate and trust administration (including advising executors and administrators of estates about post-mortem planning and the local probate process in Virginia), as well as general aging and disability advice in Northern Virginia, including but not limited to Arlington, Alexandria, Ashburn, Bristow, Burke, Centreville, Chantilly, Gainesville, Fairfax, Falls Church, Haymarket, Herndon, Leesburg, Manassas, Manassas Park, Reston, Springfield, Sterling, and throughout Loudoun, Prince William, and Fairfax counties.

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