Many clients ask, ” Do we have to sell their loved one’s house when she enters a nursing home?” Our response is usually, “Not necessarily”.
One of the ways to avoid a sale, is to use the Five Year Plan when doing Medicaid Planning. This strategy entails the transfer of the house at least 5 years before the loved one files for Medicaid. The transfer does not need to be disclosed since it was transferred before the Medicaid look back period of 5 years begins. For example, if the parent’s house is transferred to the kids or other transferee on September 1, 2017 and that parent does not file a Medicaid application until October 1, 2022, then the house is clear of any Medicaid forced sale.
Another strategy is to transfer the house to a person with a disability or that person’s Special Needs Trust. This can be done at any time-even within the 5 year look back period. The person with a disability is usually someone who has been declared disabled under the Social Security regulations.