Kicking one spouse out of a nursing home when the other spouse dies

Last updated: May 07, 2024
Medicaid Long Term Care | Questions and AnswersCategory: BenefitsKicking one spouse out of a nursing home when the other spouse dies
medicaidplanner Staff asked 4 years ago

When one spouse lives at home and the other spouse lives in a nursing home on Medicaid and the spouse at home dies, will the spouse in a nursing home inherit the home and if they do, does Medicaid take it? Do they have to sell it? If they sell it, does Medicaid take the proceeds? Or does the spouse get kicked off of Medicaid and out of the nursing home?

1 Answers
medicaidplanner Staff answered 4 years ago

No, in the vast majority of cases, following the death of the community spouse (the non-Medicaid spouse who lived at home), Medicaid will not take the home, nor will force the sale of it. Since it is very rare that Medicaid will “take” and force the sale of a Medicaid beneficiary’s home while they are still living, for the purposes of answering this question, we will assume this will not happen. If the Medicaid beneficiary does sell the home, Medicaid will not take the proceeds from the sale, but they will count as assets towards Medicaid’s asset limit. This will most definitely cause the Medicaid beneficiary to have “excess” assets, resulting in Medicaid disqualification. During this time, the individual will have to pay privately for nursing home care, but they will not be kicked out of the nursing home. Once the “excess” assets are “spent down” to Medicaid’s asset limit, they can reapply for nursing home benefits. Further detail and explanation is provided below. Note that for the purpose of answering this question, we assume the word, “inherit,” is being used very loosely and that the couple jointly owned the home, as is the case with most married couples.

To be eligible for long-term care Medicaid, an applicant must have limited assets, among other eligibility criteria. In most states, the asset limit is $2,000. See state-specific asset limits. Some assets, such as one’s primary home, is generally exempt from Medicaid’s asset limit. This means it does not count towards the limit. A single applicant residing in a nursing home must have “intent” to return home and have a home equity interest under a state-specific value for home exemption. In the case of a married couple, in which one spouse continues to live at home, the couple’s home is exempt from Medicaid regardless of the applicant’s “intent” to return home or their equity interest in the home. However, when the spouse at home passes away, the nursing home beneficiary must express an “intent” to return home and have a home equity interest no greater than the state’s limit in order for the home to remain exempt from Medicaid’s asset limit.

State Specific Medicaid Eligibility Requirements

As mentioned above, if a Medicaid beneficiary does sell their home, it can be expected that the proceeds from the sale push them over Medicaid’s asset limit. When one has “excess” assets, they must spend them down until Medicaid’s limit is reached. As a word of caution, one cannot spend the “excess” assets in any manner they wish. This is because Medicaid has a Look-Back Period of 60-months in which Medicaid scrutinizes all asset transfers to ensure no assets were gifted or sold under fair market value. Note that there are some state-specific exceptions. If one violates the Look-Back Rule, it is assumed it was done with the intention of meeting Medicaid’s asset limit and they will receive a Penalty Period of Medicaid disqualification. One way in which one can spend down the extra assets without violating the Look-Back Rule is to use the funds to pay for nursing home care. See other examples.

One’s home, although most likely exempt while the Medicaid recipient is living, is not usually safe from Medicaid’s Estate Recovery Program (MERP). All states have a MERP program in which the Medicaid agency attempts to collect payment for long term care services for which it paid during the life of a deceased Medicaid beneficiary. Often, the only asset of any value remaining is one’s home, and it is through the home that Medicaid most commonly tries to be reimbursed. To protect one’s home from MERP, advanced Medicaid planning must take place.

Professional Medicaid Planners not only can provide advice given one’s particular situation, but they can also help to implement Medicaid planning strategies that protect one’s home.

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