Correcting a Medicaid Mistake 15 Years in the Making #MondayMorningBlog

           I received a call the other day concerning the following dilemma.  Monica and her husband, Paul had bought a home together with Monica’s mom 30 years ago.  The home was held as tenants in common, meaning if, for example, Mom died her share would pass by way of her will and not automatically to Monica and Paul.

            Approximately 15 years ago, the family went to an attorney to change the ownership.  What they wanted was to transfer Mom’s interest to Monica and Paul, with Mom keeping a legal right to live in the home as long as she lives.

            Fast forward to today.  Mom is in failing health but still living at home.  The family would like to keep Mom at home for the rest of her life with care if needed but they also recognize that Mom could run out of money and need to apply for Medicaid.  That’s when they pulled out the deed.  It didn’t appear to reflect the change they thought they made 15 years ago.

            They were right.  The deed change did not transfer title the way they remembered.  Instead, the deed reflected a change from Paul and Monica, his wife and Mom, tenants in common to Paul and Monica, husband and wife and Mom as joint tenants with right of survivorship.  This means when Mom dies her share automatically goes to Monica and Paul, regardless of what her will says.  No mention is made on the deed about Mom reserving a right to live there.  That’s because she still owns a 50% interest in the home.

            The question they asked is whether executing another deed now to effect a change they say should have been done 15 years ago will serve to protect Mom’s ½ from being counted as an asset for Medicaid eligibility purposes and whether it also will be protected from Medicaid’s estate recovery laws.

            Next week I’ll tell you what I told Monica.