A common assumption is that if you enter a nursing home, Medicaid will immediately take your house to pay for your care. In reality, that is not exactly true. Here are three common scenarios:
1) If you are married, your spouse is always allowed to stay in the house as long as he or she lives. However, after both spouses die, the State of Ohio will sometimes put a lien on the home. If that happens, the State will make a claim for the amount they have paid out in Medicaid benefits. This claim would then usually be paid from the proceeds of the house sale. With proper legal planning, this can sometimes be avoided.
2) If your spouse dies while you are still living in the nursing home, Medicaid may demand that you sell the home and use the proceeds for your nursing home costs. Again, depending on the circumstances, you can sometimes preserve the family home. Each situation is different. For example, if a son or daughter is living in the home and provided two years of care to the nursing home resident, this child can sometimes be given the home as a gift to avoid a forced sale by Medicaid. This is usually referred to as the child caretaker exception. Unfortunately, the Medicaid caseworker will not always let you know about this rule. Another exception is if you have have a permanently disabled child. In that situation, the home can usually be given to that child, without adverse Medicaid consequences.
3) If you enter a nursing home and do not have a spouse or child living in the home, Medicaid will allow you to keep the house as long as you intend to return home. Otherwise, you must sell the home before you can attempt to qualify for Medicaid. There are some exceptions to this rule, such as the child caretaker rule. When the home sells, the proceeds must generally be used for your nursing home care. If you die before selling the home, the State of Ohio will usually put a lien on the home. If that happens, the State will make a claim for the amount they have paid out in Medicaid benefits.
The good news however, is that through proper legal planning, you can sometimes preserve the entire value of the home for future generations. Even in cases where Medicaid demands that you sell the home, there are often ways to preserve a portion of the sale proceeds for your family.
Each situation is unique, so you must consult with a qualified elder law attorney to go over your best options.