The Law Offices Of Michael Camporeale

15 Years Of Extensive Experience

Transfer of Your Home and Medicaid Eligibility

If a single individual requires long-term custodial care in a NY nursing home, certain eligibility requirements must be met. Almost all of a person’s assets, including their primary residence, could be considered an available resource for the purposes of Medicaid eligibility – unless some exemption under the law applies.

Therefore, unless certain exemptions exist, an individual would be considered ineligible for nursing home care under New York Medicaid if their assets are in excess of approximately $14,800 for a single individual.

Generally, under NY Medicaid law, there is what is known as a Medicaid Lookback Transfer Penalty rule. Such a rule requires a sixty-month or a five-year look back penalty period for the transfer of any and all assets for New York nursing home care. A penalty period for NY nursing home care will only begin to start when an individual physically enters a nursing home and applies for New York Medicaid.

Certain transfers of assets are exempt under the 5 Year look back Penalty Period. A homestead can be transferred without penalty to certain individuals and would be considered an exempt transfer under certain circumstances. That situation would occur if the home’s deed was transferred to a spouse, a minor, or a disabled child, or an adult child who has resided in the home with the parent for at least two years prior to the transfer, and has been a primary caregiver to the applicant owner applying for NY Medicaid or is a sibling, who has lived with the owner for at least one year prior to the transfer, and who has an equity interest in the property. Those situations would fall under the legal exemptions to the transfer of a homestead for Medicaid eligibility requirement. The Law Offices of Michael Camporeale can meet with you, and determine whether an exempt transfer of the homestead is something that is possible and if it makes sense for your particular situation and if so how and what is the best possible way to accomplish such a transfer without affecting your ability to secure NY Medicaid benefits.

The Law Offices of Michael Camporeale as well versed and experienced NY probate and Medicaid Elder Law attorneys have been providing transfers of homes with life estates and other exempt transfers to clients in excess of a decade, and we have been successfully providing those services to individuals throughout the New York City area including Bronx, Queens, Manhattan, Long Island, Staten Island, Westchester and Brooklyn.

The transferring of a residence with the retained life estate is available for an individual to transfer their home to their children subject to them retaining a life estate, which ultimately would give the individual, the person transferring the property the ability to live in the home for the rest of their life. Therefore, if there is ever a falling out with the child, the person that is transferring the home cannot be made to leave the residence. However, there is still a sixty-month penalty period for the transfer of the asset with a retained life estate unless an exemption applies.

New York Attorney Michael Camporeale

Get your questions answered - call me for your free phone consultation (718) 475-9639

Therefore, if a crisis arose where an individual needs to go into an NY Nursing home facility immediately and wants to transfer his or her home to someone who does not fall into the exempt category, the transfer will be subject to a five-year, or a sixty-month penalty period and would disqualify a person for Medicaid benefits. The same rule would apply if homestead transfer had taken place at any time within the prior 5 years of applying for institutional Medicaid in New York. This would mean that the transfer of that particular asset the homestead would disqualify them for a nursing home care.

The future sale of a residence during an individual’s lifetime if they should need to go into a nursing home, and they have a retained life estate has certain consequences a person must be aware of.

In the above scenario, where the applicant has a retained life estate, and 5 years has passed since the transfer of the homestead, the future sale of the residence during an individual’s lifetime that is applying, or is already in a nursing home is still subject to the proceeds having value to the life tenant. This means that an individual that has the life estate in the homestead while in a nursing home, or prior to entering into the nursing home should not sell, or transfers their life estate interest in that property, because that life estate has a particular value, and that value would disqualify them for nursing home care through the Medicaid program. It does not necessarily make sense to sell the residence or the home that has a retained life estate only in a deed and not in a Medicaid trust if an individual is in either in a nursing home or prior to entering the nursing home, or at any point in time prior to the death of the life tenant.

However, sometimes, the occasion does arise when individuals do have a life estate interest in the property and it is not in a Medicaid trust and family members want to sell that home. However, the better protocol or the better Medicaid planning option would have been, if possible, at the time that the life estate was done would have been to put the property into an NY Medicaid asset protection trust to give flexibility. The latter option would allow better options for the future sale of the property, meaning if it was in a New York Medicaid trust when the property was sold, as long as you have passed that five-year look back penalty period, the individual applicant who is on NY Medicaid or applying for Medicaid would not be deemed over-resourced by the sale of the life estate, as the life estate value would not be penalized if it was the trust that maintained the life estate value. This property would be in the trust, and the life estate would not be attached to the deed but would be attached to the language in the trust.

Therefore, upon the sale of the property, if the property was held in the NY Medicaid trust for at least five years, there is no value attached to the life estate when the language is indicated in the New York Medicaid asset protection trust. Therefore, this is by far a better planning technique if it was available, and initiated at the start of the Medicaid planning process.

However, some individuals, for whatever reason, when they did their initial Medicaid planning, may have simply done a deed with a life estate and not created a Medicaid asset protection trust. That was generally the case under the old law, which changed in 2006. Prior to 2006, the transfer of a home with the life estate only incurred a three-year look back penalty period, whereas putting it into the Medicaid asset protection trust would have triggered the five-year penalty period, so, most practitioners would not have wanted to increase the look back penalty period from three to five years.

However, with the deficit reduction act in 2006, the law changed and now the five-year look back penalty period applies across the board. The life estate only in a deed generally is not the preferred option of NY Medicaid planning anymore, and moving the property into the New York Medicaid asset protection trust, is the better option today unless one of the prior discussed exemptions apply, which most of the time, most people do not have those exemptions available to them.

These options and planning techniques can be explored by the highly experienced NY probate and Estate Planning attorneys at the Law Offices of Michael Camporeale to see what is the best option for you and your family so that we can protect your families’ assets from the catastrophic cost of NY nursing home care and avoid probate in New York.

We have been successfully providing these expert NY Medicaid planning techniques, for well over a decade, and have been successfully helping many families apply for and qualify for NY Medicaid eligibility and avoid NY probate throughout the entire New York City metro area including Queens, New York, Westchester, Bronx, Brooklyn, Staten Island, Long Island, and Manhattan.

For more information on Transfer Of Your Home & Medicaid Eligibility, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 475-9639 today.

New York Attorney Michael Camporeale

Get your questions answered - call me for your free phone consultation (718) 475-9639

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