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How will Medicaid treat my dad’s life estate in our home?

Additional Information:

My dad broke his hip at his house, there are just too many stairs for him to safely navigate.  We sold my dad’s house; used the money as a downpayment on our new ranch style house for myself, my wife and my dad. We went though an Massachusetts eldercare lawyer who created the deed giving my dad a life estate and my wife and myself ownership after my father’s death. My name is the only name on the mortgage. My Dad lived with us for 1 year and 4 months; his dementia has really increased and we had to put him in a nursing home. We are applying him for Medicaid. Any ideas on how Medicaid will treat the life estate?

ATTORNEY ANSWER:

Your father purchased a life estate in your home.  The question is whether MassHealth will treat this as a disqualifying transfer.  I will assume that he paid fair market value for the life estate.  (If he had paid more, he would have been making a gift to you and your wife.)  MassHealth will scrutinize this transaction.  The rule of thumb is that the elder would have had to live in the home for at least a year for MassHealth to consider this a purchase for fair market value.  MassHealth treats an ownership in a residence as a non-countable asset.

The Beliveau Law Group: Massachusetts | Florida | New Hampshire

The attorneys at The Beliveau Law Group provides legal services for estate planning (wills and trusts), Medicaid (planning and applications), probate (estate and trust administration), business law (formation and operation), real estate (residential and commercial), taxation (federal and state), and civil litigation (in connection with these practice areas). The law firm has offices and attorneys in Naples, Florida, Waltham, Massachusetts, and Salem, New Hampshire.

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