I occasionally meet with people who have chosen to transfer their home to someone else while they are still alive. They do this by signing the deed to their home over to a child, spouse or someone else. When the deed is signed over, that home – in many cases, the most expensive asset that person owns – is now completely in the control of someone else.
When I ask why they choose to give their home to someone else, I am often told that they believe it is an effective way to qualify for Medicaid assistance if they need long term care. I recognize that the circumstances for each family are unique. However, I have yet to advise a client it is a good idea to give their home to someone else while they are still alive.
When people transfer their home in order to qualify for Medicaid long term care assistance, they are setting themselves up for a double “whammy.” First, when the need for long term care arises, Medicaid will not be available if you have given away assets (like your home) in the previous five years. There is no plan in which you can give away your assets, and then immediately apply for and receive Medicaid assistance.
Second, once you give assets away, and find out you won’t qualify for Medicaid anyway, you may not get your home back. I have had more than one situation in which a client gave his home to a family member – in case he needed to apply for Medicaid – and the family member refused to give the home back. Ironically, in those cases, my clients never actually needed to apply for Medicaid. As a result, they never received Medicaid assistance and they lost their home.
The “shortcuts” you have been told about often turn out to be anything but a shortcut. Come to a free, no obligation, presentation and find out how simple it can be to protect yourself and your assets.