One of the Most Common Questions That We Get Asked is if There’s a Way to Protect the Home?
How do I protect my house? Can I protect my home from a nursing home stay or keep it away from Medicaid so that if I have to go to a nursing home, my family can still inherit my home? Personally, I believe the best and most effective way to do this is by creating what is called a Medicaid irrevocable income-only trust, sometimes just referred to as a Medicaid trust.
When done properly, these trusts can protect the home, so long as first off, if the provisions of the trust are written correctly, the donor doesn’t have a right to take out the trust property but there are emergency exceptions though, and then second, the transfer is made five years ahead of time. Under newer rules, if that home is deeded into the trust five years before applying for benefits, Medi-Cal health cannot put a lien against the house, cannot seek to have the house sold, and can’t make any other claim to that real estate so the home is protected.
These rules are ever-changing. Written trust documents are being challenged by Medi-Cal all the time. Estate planning and elder law attorneys have to be continually updating their education and their documents to reflect any new cases or any latest information, including the reasoning behind any new challenges to the trust documents. Furthermore, no one can guarantee that these rules will always allow these transfers. The law can forever change. But if done correctly, these trusts can help protect your home. This is a huge upside, with minimal drawbacks.
It is crucial if you have a Medicaid trust drafted that you have it prepared by a qualified and experienced elder law attorney. If done wrong, it can be all for nothing. If there is any way, the language allows for challenges or potential holes that Medi-Cal can exploit, and they will definitely do so.