Will the State Take Your House?

There are two mistaken beliefs about a person’s house when they go on Medi-Cal to pay for their nursing home cost. The most common misbelief is that the state will take your home when you die. That’s wrong if you plan properly. The second misbelief is that the home is an exempt asset, and therefore you can get Medi-Cal to pay for the nursing home even if you have own a residence. This belief is part true and part false. The residence is an exempt asset, but the state wants to recover their payments after the elder’s death by placing a lien upon the residence so that the get paid. This action is called “estate recovery.”

Medicare is what you get when you turn 65 years of age. Medi-Cal requires that you meet certain financial eligibility rules. There are thousands of people statewide in nursing homes with their monthly bill being covered by Medi-Cal, but to be eligible for Medi-Cal to pay for the nursing home, they can only have a maximum of $2,000 of countable assets in their name. There are two ways to do this. First, you could spend all of your money on care and then become eligible, or second, you could work with a qualified elder law attorney to protect your assets with a plan that’s allowed by California law.

The sad cases are when people come to me too late and tell me, “We just finished spending the last of Dad’s $400,000 on the nursing home payments, and we don’t know what to do next.” The families in those cases are always stunned to find out that the elder’s money could have been protected. They look at me and ask, “Why didn’t anyone tell us about this three years ago?”

Medi-Cal is California’s name for Medicaid, and our laws here are different than the laws in the other 49 states. Our laws allow people to protect their residence, vacation homes, rental properties, farms, and other financial assets, . . . but only if they plan properly.

Don’t lose your hard-earned money to nursing home payments, and don’t let the state recover costs against the elder’s residence. Plan ahead by working with a qualified elder law attorney.