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When I meet with an elder law client for the first time, their primary concern is often their house. Nothing engenders more anxiety than the thought or the prospect of perhaps having to lose their house. And they ask, “Am I going to have to sell my house in order to qualify for Medicaid? Because my house is worth however much money. And I know that’s more than $2,000, which is Medicaid’s asset limit. And so what can I do?” And the answer is if you come to me soon enough, you will not need to sell your house. There are a number of strategies that we can deploy that will say, preserve the house, if that is your primary desire.
But first, what a lot of people don’t realize is that most of the time the house, if it’s the homestead, it’s not going to be a countable asset anyway, by Medicaid. Medicaid has a few requirements in order to exclude the house as a countable asset. The first is the Medicaid applicant must have an intent to return home. And even if it’s not likely that they’ll return home, Medicaid will honor that intent. Currently it’s their policy not to investigate that too much. And so people go, “Well, if I’m in a nursing home, how can I have an intent to return home?” And what I say is if you were to walk into any nursing home and ask people, do you intend to return home? Do you intend to return home? Do you intend to return home? They’d all say yes, yes, yes, because nobody wants to be in the nursing home. They all want to go back home. And sometimes they do, even though quite often, they don’t.
The second requirement is that Medicaid, as of the filming of this video in 2016, there is an asset, I’m sorry, an equity limit of $552,000. So as long as there is $552,000 or less in equity in the home, Medicaid will not count it as a resource. The exception to that is if there is a spouse who still lives in the home, if there is a special needs child who still live in the home, or child who’s under the age of 21, then it doesn’t matter what the house is worth. It’s not going to be counted and Medicaid’s not going to force the family to move essentially.
So, that’s it. So what is this equity limit? So I’ll give you an example. Let’s say you have a house worth $600,000. Where you’re saying, “Well, that’s over $552,000. I’m in trouble.” The answer is, not necessarily. If you have a $200,000 mortgage, or $200,000 left on your mortgage, then there’s only $400,000 in equity. And that is less than the $552,000 standards. So the house is safe.
If your house is worth $600,000 and there’s no spouse or children living in the house, and there’s no mortgage, then we have some additional tools at our disposal. One of them is a reverse mortgage, which helps you pull equity out of the house. And there are some also tools available as well.
So it is disheartening when someone comes to me, and this has happened before. They come to me and they go, “I already sold the house. Now I need to qualify for Medicaid.” I say, “I wish he came to me a few months ago or a year ago. I could have saved the house.” And in almost every case, if someone desires to hold onto their house, we can make that happen for them. So you should not have to sell your house in order to qualify for Medicaid.