Q&A: Can Medicaid take a home for payments?

My boyfriend's father recently had a stroke. He is unable to write or speak. My question is regarding his home. In the father's will, he left his home to my boyfriend. But I'm wondering what's going to happen now. I was told that Medicaid can take the home for payment since his father is probably going to have to live in an assisted living facility. Is this true? What should we do about this?

 When a person has little or no money to pay for medical care and assisted living facilities, Medicaid picks up the costs for that care. But when a person has assets and a means to pay for his or her medical expenses, the government expects that person to use up his or her money first. When his or her assets have been exhausted, then Medicaid picks up the rest of the costs.

If your boyfriend's father ends up requiring prolonged care, his assets will be at risk, including the home.

There are a couple of things that you should keep in mind: First, if your boyfriend's father is the sole owner of the property and the home is worth a significant amount of cash and has lots of equity, the government may require whoever is now managing your boyfriend's father's affairs to sell the property and use the funds to pay for his care.

If the home has a mortgage, or if it has little equity value, or if it is co-owned with the man's wife or someone else, the government might not force the sale. In this case, the government might put a lien on the property for the cost that it incurs for medical care. When the home is sold, the government will get paid off from the proceeds, and what is left will go to the heirs.

If, however, your boyfriend's father and his wife or partner own the home jointly, Medicaid may not require the sale of the home to force the spouse or partner out of the home. If the father were to die, the home should pass automatically to his spouse or partner and bypass any Medicaid issues.

You should also know that you can't just transfer the home to a relative and expect the government not to care.

If necessary, Medicaid will perform a sort of audit on your boyfriend's father's assets to determine if any were given away in order to avoid paying the tab for his medical care. If assets were given away, then Medicare has the right to go after those assets. So, if the home went to your boyfriend now, and his father required those funds to satisfy his medical bills, Medicaid could come after him for the money.

Frequently, when faced with these situations, people will sell the home and use the proceeds from the sale to pay for expenses that may be coming from outside sources. For example, if he was using retirement funds to live on, he could use the proceeds from the sale to pay for living expenses. If family members were helping out with his living expenses and caring for him, those family members could get paid or reimbursed for those expenses.

While Medicaid rules are tricky, your boyfriend should talk to an estate planner to see what assets his father has and how he should proceed. The family may need to obtain a guardianship order to handle the affairs of his father's estate while he is living to make sure that the proper decisions are made.

Please drop us a line and tell us how things proceed and what he decides to do.

Samuel J. Tamkin is a Chicago-based real estate attorney. Ilyce R. Glink's latest book is "Buy, Close, Move In!" Distributed by Tribune Media Services.

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