The Medicaid Homestead Exemption allows a person who has entered a nursing home to apply and qualify for Medicaid even if they still own their home, assuming all other economic thresholds are met. In order for the Homestead Exemption to apply, the nursing home resident or the Agent for the resident must sign a statement that the resident might return home. Note that even though the nursing home resident might not need to sell his/her primary residence in order to qualify for Medicaid, the PA Department of Public Welfare will expect to be reimbursed for the care paid for through Medicaid, either when the property is sold during the lifetime of the nursing home resident or after they have passed away. If the primary residence is sold after the death of the nursing home resident/owner who has qualified for Medicaid, the PA Estate Recovery Statutes would apply.
Below is an interesting New York State case that is likely a strong indicator of how things would be handled here in Pennsylvania if the nursing home resident has qualified for Medicaid through the use of the Homestead Exemption and subsequently sells their primary residence (ie. the Family Home).
A Medicaid applicant who signed an intent to return home but sold her apartment two months later is entitled to have the apartment excluded from her available resources for the period before the apartment was under contract, according to a New York appeals court. Inglese v. Shah (N.Y. Sup. Ct., App. Div., 2nd Dept., No. 2499/12, Oct. 1, 2014).
In November 2010, while Ophelia Inglese was residing in a nursing home, her daughter signed a statement that Ms. Inglese intended to return home to the apartment she owned. On January 26, 2011 Ms. Inglese entered into a contract to sell the apartment. She applied for Medicaid benefits retroactive to December 2010. The state counted her home as a resource and denied benefits.
Ms. Inglese appealed, arguing that because she intended to return home, she should be eligible for benefits between December 2010 and the date the sale contract was signed. The state ruled that the contract for sale negated Ms. Inglese’s intent to return home for the entire three-month period before she applied for Medicaid. Ms. Inglese appealed to court.
The New York Supreme Court, Appellate Division, grants Ms. Inglese retroactive Medicaid benefits, holding that she was entitled to have her home excluded from her available resources. The court rules that in light of Ms. Inglese’s statement of intent to return to her home, “the mere existence of the January 26, 2011, contract of sale did not overcome the presumption in favor of recognizing the homestead exemption, nor did the existence of the contract establish that the petitioner did not intend to return home for the period in question.”
For the full text of this decision, go to: http://www.nycourts.gov/reporter/3dseries/2014/2014_06586.htm
For assistance dealing with developing a comprehensive nursing home asset protection plan in Pennsylvania, please contact Douglas L. Kaune, esquire at 610 933 8069 or email him at dkaune@utbf.com. Doug’s entire practice is focused on elder law, Medicaid Application, estate planning, trust planning, estate admisitration and protection of clients’ assets from nursing home spending and estate and inheritance taxation. Unruh, Turner, Burke & Frees, P.C. is a full service law firm which has three convenient office locations in Phoenixville, West Chester and Paoli, Pennsylvania. The firm primarily services clients in Chester, Montgomery, Delaware, Philadelphia, Bucks and Berks Counties, but can represent clients throughout Pennsylvania.
