Can Medicaid take my home and life savings if I go into a nursing home?

On a regular basis, clients express to me their fear that if they ever go into a nursing home and/or need

long-term care, the Medicaid program will take their home and life savings. While it's prudent to be concerned as to what will occur if you or a family member needs long-term care, Medicaid does not seize the recipient's home, its contents and his or her life savings upon eligibility for the Medicaid program.

If one is both financially and medically (categorically) eligible for Medicaid, and Medicaid has provided services to the Medicaid recipient (nursing home and/or home care), Medicaid will have a claim/lien against the individual's estate at the time of his or her death.

42 US. Code 1396p (b) (4) defines the estate of a deceased person to include all real and personal property and other assets included within the individual's estate, as defined for purposes of state probate law. It may also include, at the option of the state, any other real and personal property and other assets in which the individual had any legal title or interest at the time of death, including such assets conveyed to a survivor, heir or assign of the deceased individual through joint tenancy, tenancy in common, survivorship, life estate, living trust or other arrangement.

New York, as permitted by federal law, has opted to limit the definition of one's estate for Medicaid recovery purposes. Social Service Law § 369 (6) limits the definition to one's probate and/or intestate estate (when one dies without a last will). Thus, only assets that are in the decedent's name alone, which do not have a named beneficiary, rights of survivorship such as joint accounts, life insurance policies (with named beneficiaries), retirement accounts and/or payable on death or transfer on death are coasidered part of one's estate for recovery purposes.

Additionally, revocable and/or irrevocable trusts are not probate assets thus, they are also not subject to estate recovery in New York. However, it should be noted that the transfer of one's assets to an irrevocable trust will disqualify the Medicaid applicant and his or her spouse for nursing home Medicaid in New- York, and create a 60-month look-back period. Assets transferred to a revocable trust do not create said look-back period, however, they are still counted as available resources for purposes of Medicaid eligibility.

While the use of an irrevocable trust does create the fiveyear look-back period (period of disqualification for nursing home Medicaid, not home care Medicaid in New York), once said period has passed the assets in the irrevocable trust will no longer be available and countable resources for purpose of Medicaid eligibility. The assets in the trust will also no longer be subject to Medicaid recovery.

Finally, with respect to the residence of a Medicaid recipient, under New York Social Service Law § 369 (2)(a)(ii) and 18 N.Y.C.R. §3607.11 (a)(3) (ii); a Medicaid lien may not be placed on the residence if the residence is still occupied by the recipient and/or his or her spouse, a child under 21 years of age, a blind or disabled child of any age, and/ or a sibling who has an equity interest in the home and has resided in the home for one year prior to recipients admission to a medical institution.

While the above may seem helpful in preventing Medicaid from placing a lien on the residence, in many instances, at the time of a Medicaid recipient's death the home is owned by the recipient in his or her name alone and/or jointly with his or her spouse. Thus, Medicaid can file its lien for services provided immediately upon the death of the single Medicaid recipient or upon the death of the surviving spouse.

In conclusion, the most prudent course of action to avoid Medicaid recovery and/or liens is to be proactive and utilize an Irrevocable Medicaid Asset Protection Trust and gifting scheme, if appropriate, before the need for long-term care becomes a reality.