Medicaid and the Family Home

Preserving the family home is the biggest concern of Medicaid applicants and their families. In addition to being the largest single asset for most, it holds deep sentimental value and provides shelter and security to close family members.

To qualify for Medicaid in Ohio, an individual can have no more than $1,500 in countable assets. The individual’s home is exempt (not countable as an asset) so long as the individual or a recognized dependent resides there or for the first 13 months of the individual’s nursing home admission. Recognized dependents include a spouse, child under the age of 21, a disabled child or a sibling with an equity interest in the home. After 13 months and when no dependents reside there, the individual’s interest in the home becomes a countable asset which must be sold in order for the individual to continue to qualify for Medicaid. If the individual who received Medicaid passes away, any interest he holds in the home may be subject to Medicaid Recovery. If dependents reside in the home at the time of his death, Medicaid Recovery may place a lien on the home to be collected when dependents no longer reside there.

  • Transferring the home to the spouse: The Medicaid Applicant may transfer his interest in the home to his spouse. This transfer is exempt so long as the spouse does not later transfer the house for less than fair market value. If the spouse does sell the house, the proceeds become countable unless she reinvests them in another residence within three months. Once the house is transferred to the spouse, she should change her Will to exclude the Medicaid Applicant in case she dies first and the entire value of the house would become a countable asset again. Even if the Will is changed, the Medicaid Applicant would still be entitled to a portion if he survives the spouse.
  • Transferring to a disabled child: The home may be transferred to a disabled child with no penalty. It will be necessary to document the disability to Medicaid.
  • Transferring to a sibling with an equity interest: The home may be transferred to a sibling who holds an equity interest without penalty so long as the sibling has resided in the home for at least a year prior to the individual’s nursing home admission.
  • Transferring to a caretaker child: A caretaker child is one who has resided in the home and cared for the Medicaid Applicant for at least two years. A doctor must certify that without the caretaker, the individual would have required nursing home care two years earlier. A caretaker child transfer is exempt so long as it is made prior to the Medicaid applicant’s first 13 months in the nursing home.
  • Penalized Transfers: If the home is given to someone whose status is not exempt later than 60 months before the Medicaid Application, the transfer may create a penalty preventing the individual from qualifying for Medicaid for some period of time. Situations must be examined individually to determine the length of the penalty, if any.
  • Sale of the home: Medicaid considers the transfer of the home a sale (rather than a gift) if it is sold for at least 90% of the “fair market value”. The appraised value on the county property tax bill will be considered the “fair market value” unless other evidence in the form of a private appraisal is presented. Once sold, the proceeds from the house are considered countable assets and, to the extent they exceed $1,500, will disqualify the individual from Medicaid.

Medicaid rules surrounding the family home are complex and constantly changing. It is important to seek competent legal advice in planning.

By Marta Williger, CELA | Williger Legal Group, LLC | Munroe Falls, Ohio |

This article was originally published at
It has been re-posted here with permission from the author.

This article is for informational purposes only and is not intended to be advertising, solicitation, or legal advice.  This article may not reflect the most recent legal changes.  Individual circumstances vary, and laws differ from state to state.  If you have a question about your specific situation, we recommend that you find a certified elder law attorney in your area.