QUESTION: My father may be going into a nursing home soon and my brother and I are concerned about him losing the house. His name is the only name on the mortgage at this time. Should my brother and I put our names on the mortgage? If he needs to go into a nursing home will he need to sell the house to pay for his nursing home care?
ANSWER: This question has a lot of important content packed into it. To start off, it is important to distinguish between ownership and debt. Someone may owe a debt on something which they don’t own any portion of. For example, suppose your father co-signed on your car. If you fail to pay the car payments, the company can seek payment from your father even though he doesn’t own the car. A similar thing could be going on here. If your father co-signed for the mortgage but doesn’t own the house, there’s no concern regarding his potential need for long-term care as he has no asset which the state could seek payment from.
Putting that possibility aside, it seems more likely that your father also owns the house. If that is true and your father needs long-term care, then we are talking about qualifying him for Nursing Home Medicaid in Georgia. Medicaid is a federal program which provides for the payment of skilled nursing care for needy individuals. Most everyone is aware of the Medicaid 5 Year look-back period. If your father needs to go into a nursing home within the next five years, Medicaid is going to look back over the five years immediately before the Medicaid application and see whether he gave away any of his assets. If he did, a penalty period will be imposed preventing the state from paying for his care during the penalty period.
Putting either your name or your brother’s name on the deed would be considered a gift and would trigger a penalty period.
As long as your father’s equity in the house is less than $585,000, owning the house would not prevent him from being able to qualify for Medicaid coverage. If he needed a skilled nursing facility tomorrow, the fact that he owns the home would not be considered to determine whether he qualifies or whether he needs to spend down some of his other assets. However, if a person receiving Medicaid passes away owning an asset worth more than $25,000, Georgia Estate Recovery will seek reimbursement from the Estate for the value of the services provided.
Medicaid planning is very detail oriented, and every detail changes the recommendations our firm would give. Any time we are dealing with something so intricate, it is important to make sure we have all of the facts. That is why our best recommendation for anyone who sees a long-term care event on the horizon is to come in for a free consultation with one of our attorneys. That way, we can develop the plan that works best for you in your individual circumstances. Rest assured, regardless of where you are in the long-term care cycle, we are experienced at helping people in the same situation, and we can help you!