Ask Terry Questions Illinois medicaid and co-owned property

Illinois medicaid and co-owned property

By Terry Savage on September 21, 2019 | Wild Card

How does co-ownership (50% each) of property by a single parent and an adult child effect public aide eligibility for nursing home and hospice ? Does the Medicaid amount spent need to be paid back when the property is sold?
IDPA website did not answer this clearly for me.
Thank You.

Terry Says

The reason you can’t get a straight answer is because this is a gray area.   Here’s a link to the best reference on what is allowed to be kept in both assets and income if you apply for Medicaid in Illinois.

You’ll note that this article states that a “community spouse or dependent” may keep the family home, and the “institutionalized spouse” can still qualify for Medicaid nursing home care.  That’s a significant change in wording from when I last looked — which was several years ago.  At that time, I am quite sure the wording was “adult child who lives full-time in the home.”    Other sources I checked currently refer to  a” minor child, or disabled adult child” as allowed to remain in the residence as exempt from the look-back for reclaiming money by Medicaid.  I really don’t know whether the law has changed, or the interpretation.

All of this relates to the 5-year look-back period in which Medicaid can consider assets transferred in order to qualify for state-paid nursing home care.   You asked about whether the state will come after the proceeds of the home when it is sold, presumably after the death of the person on Medicaid.  So far as I know, the state has not gotten organized to delve into this recapture process on a very thorough basis, but as the state searches for money it is likely to be on their to-do list.

If the property is titled in Joint Tenancy with Right of Survival, it will not go through probate court — where an asset in the decedent’s name is likely to be matched with state records.  That would appear to make the total value a bit safer after the passing of the parent.  But if you attempt to sell property held jointly with a person currently receiving Medicaid benefits, then you are pretty much waving a red flag in front of authorities.  If the half of the house owned by the child was transferred at least 5 years before applying for Medicaid, it would appear that at least half the proceeds would be exempt from the Medicaid look-back.

So, a lot depends on timing,and the interpretation of the “adult child” as a dependent definition.  I’m not giving you a legal answer, but I’ve followed this issue for quite a while, and in the past it was clear that if the home was the primary residence of an adult child, it would be exempt.  That simply may not be the case in the future if the state decides to go after assets more aggressively.





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