Too Late to Help: Medicaid Lien Will Take Their House


I got a phone call today from a lady asking for help. Her father is about to be released from the hospital and had a heart condition and dementia. They qualified him for Medicaid to put him in a nursing home on his release and wanted legal advice about powers of attorney.

They didn’t have many assets and qualifed for Medicaid immediately. What they didn’t realize was that, although their house was not counted in determining Medicaid eligibility, there will be a Medicaid lien against it. The state can’t take steps to collect on it until both of her parents pass away; but, eventually, the family will lose the house — their only real asset.

Your home is an exempt asset if you intend to return to your home after a stay in a nursing home. After your death, your home may be subject to estate recovery, but not during your spouse’s lifetime. So, your home is an exempt resource for your lifetime and that of your spouse, or if you have a child under the age of 21 or who is blind or disabled.

They are people of modest means. They assumed, like many people do, that estate planning is “for the rich.” Their house is worth about $80,000. It’s not exactly a mansion. But it is a property that could have stayed in the family for generations, if there had been a modicum of planning first. It breaks my heart there isn’t more I can do for them.

I wish I didn’t get as many calls from people in their situation as I do.


What Next?