Second Marriage Issues – Part 4

In this week’s blog post I continue with a second marriage story.  Wife had added Husband’s name to the deed to her home along with her children.  Her intention was to allow him to remain in the home if she died first and then, when he died, the property would pass to her children.  Ownership was set up as joint with right of survivorship, meaning it would automatically transfer by law.

Wife died first but then Husband’s health deteriorated to the point where he could no longer live in the home.  While he had some assets to pay for his care, it was clearly possible that he could outlive his money and might need to apply for Medicaid.  His interest in the home would count as an asset.  

I told him that he had a couple of options.  Once he no longer lived in the home it would become a countable asset.  Medicaid would insist that he sell it and spend down his portion of the proceeds.  There was, however, another option.  If the other co-owners refuse to sell, then the home becomes an inaccessible asset.  Husband cannot be expected to sell and spend down the proceeds because the other owners refuse to the sell.  In other words, the inability to sell would not prevent him from getting Medicaid.

For a number of reasons, Husband indicated he preferred to sell and use the proceeds towards his care.  For one thing, there were some transactions in the 5 years lookback period that could result in a Medicaid penalty.  On the other hand, with the proceeds from the sale, he would have more time to private pay before needing Medicaid, thus removing these transactions from the 5 year window that Medicaid would examine.

There was also the matter of the facility that Husband had chosen.  It requires a 2 year private pay requirement before it will agree to make a Medicaid slot available.  Without his share of the sale proceeds, however, he doesn’t have enough to cover that time period.  Husband made clear to me that he and Wife had discussed that putting his name on the deed was for his protection in the event he outlived her. 

Wife’s children had different ideas.  At first, when the topic of selling arose, they asked Husband to agree that they are entitled to 100% of the proceeds.  I explained to them that this was not the case under the law and to do what they ask will make it impossible for him to qualify for Medicaid when his money runs out.  Next week I’ll tell you why.