Navigating Home Ownership and Medicaid for Aging Parents: What You Need to Know

Jan 15, 2024

By Vanessa Saunders – Founder & CEO – Global Property Systems

As our parents age, many of us face the challenge of helping them plan for their long-term care. A critical aspect of this planning involves understanding how an elderly parent’s homeownership can affect their eligibility for Medicaid benefits. With the national median cost of a nursing home room exceeding $94,000 a year, most older adults cannot afford long-term care through savings and income alone. Thus, forming a Medicaid/asset protection strategy becomes crucial in preparing for these expenses.

Understanding Medicaid and Home Ownership

Medicaid is a need-based program, meaning applicants must meet stringent functional and financial requirements to qualify. Each state sets its income and asset limits, but one common aspect is how Medicaid considers certain resources like the applicant’s primary residence. These are often deemed exempt or “non-countable” assets, influencing how we approach estate and Medicaid planning.

The Complexities of Joint-Owned Real Estate

Many seniors over 65 own their homes, and estate planning often involves strategies to protect these assets. Common methods include retitling the home to add a co-owner, such as an adult child, which can establish the right of survivorship. However, this can complicate Medicaid eligibility. When a senior adds another person to their deed, it’s often viewed as a gift, impacting Medicaid’s look-back period and potentially incurring a penalty period of disqualification for benefits.

A Strategy: Buying Property with Elderly Parents

In some cases, where an aging adult owns a small home or no house at all, and their assets exceed Medicaid limits, purchasing a new house with a child can be a viable solution. This approach helps reduce countable assets but requires careful planning and consideration of Medicaid’s rules.

For instance, if a senior, let’s call him George, sells his house and purchases a new one jointly with a child, his share in the new property may still be considered an exempt asset under Medicaid. However, this strategy doesn’t fit every family, as living together presents its own challenges.

Joint Ownership and Estate Recovery

It’s also important to consider how joint ownership affects

estate recovery after a Medicaid recipient’s death. The state seeks reimbursement for Medicaid benefits paid out, often targeting probate assets. However, joint ownership with rights of survivorship might protect certain assets from such claims, depending on state laws. In the example of George, if his state exempts joint ownership from recovery, his share in the jointly owned home could be safe from Medicaid’s estate recovery program.

Key Takeaways

  1. Medicaid Eligibility: Understand how your parent’s home ownership impacts their eligibility for Medicaid, especially if they are likely to need long-term care.
  2. Joint Ownership: Consider the implications of joint ownership, such as retitling the home, but be aware of its potential effects on Medicaid eligibility and estate recovery.
  3. Alternative Strategies: In some scenarios, buying a property jointly with an aging parent can help reduce their countable assets for Medicaid eligibility. However, this should be considered carefully and with legal guidance.
  4. State-Specific Rules: Medicaid rules vary by state, especially concerning estate recovery and home ownership. It’s crucial to be informed about the specific regulations in your state.
  5. Plan Ahead: Early planning is key. Discuss their wishes with your aging parents and consult with legal and financial experts specializing in elder law and Medicaid planning.
  6. Ethical Considerations: Navigating Medicaid and asset protection can raise ethical questions. It’s important to balance legal strategies with personal values and your aging parent’s well-being.

Helping an aging parent navigate the complexities of home ownership and Medicaid eligibility requires a delicate balance of legal know-how, ethical considerations, and family dynamics. By understanding the intricacies of Medicaid, exploring options like joint home ownership, and consulting with professionals, families can make informed decisions that support the long-term care and comfort of their elderly loved ones.

Remember, each family’s situation is unique, and what works for one may not be suitable for another. Planning, staying informed, and seeking expert advice are the keys to navigating this challenging but crucial aspect of elder care. Consider contacting an elder care attorney for personalized assistance, especially in matters involving real estate transactions. Michael LaMagna of LaMagnaMcKenna is a specialist in this field, offering services in elder law, estate/asset planning, probate, Medicaid planning, and more. He can be contacted at or 914-848-5000. Their offices are in Stamford, CT, White Plains, NY, and Pelham, NY.


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