Could your home be vulnerable to Medicaid recovery after you're gone? Join me, Greg McIntyre of McIntyre Elder Law, as I reveal the crucial measures necessary to shield your most valuable asset from being claimed to repay Medicaid expenses. In this eye-opening episode, we dissect the complexities of Medicaid estate recovery and highlight strategies like the Lady Bird Deed—an ingenious solution available in North Carolina that allows homeowners to retain control of their property while securing its direct transfer to heirs, bypassing Medicaid's grasp entirely. Prepare to be enlightened on how to navigate the treacherous waters of asset protection during life's later stages, and the pitfalls to avoid during the critical five-year look-back period.
Embarking on this journey, we unravel the often-misunderstood realm of Medicaid eligibility and the dire consequences of improper estate transfers. With the right legal guidance, you can confidently plan for the future, ensuring that your home remains a legacy for your loved ones rather than a reimbursement for long-term care costs. Throughout the episode, we delve into the nuanced approaches of trust planning and other deed options that fortify your estate against claims, while maintaining your qualification for vital Medicaid benefits. Tune in for an empowering session on safeguarding your hard-earned assets, complemented by an open invitation to connect for a personalized discussion on securing your retirement sanctuary.
Speaker 1:
Hi, I'm Greg McIntyre with McIntyre Elder Law, and today we're going to talk about a topic that is on many people's minds. Can Medicaid take your house, Brenton? Can Medicaid take my home if they pay for a long-term care benefit for me?
Speaker 2:
The answer is yes, if you don't plan correctly ahead of time, right? So I just gave away the mystery there. There is that you can plan ahead and protect yourself, but let's talk about the risk first, okay, so here's the thing with Medicaid. If you get Medicaid to pay for long-term care, which is a good option for most people, most people have three options to pay for long-term care Out-of-pocket right, that's number one.
Speaker 2:
Obviously, you could come out-of-pocket and pay for very expensive long-term care at a tune of $5,000, $10,000, $15,000 a month. There's long-term care insurance which you may not be able to afford you may be aged out of or you may have a pre-existing condition and not be able to get that. And then another one is a benefit, like VA or Medicaid. So let's focus on Medicaid. At the moment, most people who are in the middle class, if they plan ahead and plan with sufficient enough time, would be able to qualify for a Medicaid benefit to pay for the really expensive part of long-term care. So with that knowledge, you should also know that if you do work and plan to qualify for a benefit to pay for long-term care through Medicaid, that Medicaid makes you sign a document saying, hey, we have the right to recover from your state when you die, but North Carolina is what's called a limited recovery state. Okay, so that means that Medicaid can only go after those assets passing through probate. So that means that we need to do what?
Speaker 1:
Greg, you know we need to avoid probate, but we need to do it with an asset like the house. Right, but we need to do it in a way that doesn't disqualify the person who needs long-term care from the long-term care benefit from which they seek. And that's where many people come in or run into problems because they'll say, hey, I'm going to give my home to my children. They deed the home to their children. They block themselves from the benefit because they gifted out this asset of a lot of value to their children during the five-year look-back period for long-term care Medicaid.
Speaker 2:
Right, so it doesn't do you any good. You don't need to protect yourself from Medicaid. If you're never going to get it because you gave your house away, then you've effectively solved your problem, saved your house, but blocked yourself from the long-term care benefit, right?
Speaker 1:
So you haven't really solved the full problem. So the question is what can be done to protect the house effectively but still qualify for the long-term care Medicaid benefit, right?
Speaker 2:
Right and I want to just, you know, make sure that everybody's aware that not all forms of probate avoidance are, you know, equal. Okay, so giving away your home certainly avoids probate not going to actually help you in the long run because you can block yourself from that benefit. There are certain types of things that you can do to avoid probate. Not all of them will actually help you. One that will absolutely help you and protect the home is what we call the Lady Bird Deed. Okay, in North Carolina.
Speaker 2:
It's a tool that is available in North Carolina that a lot of people prefer rather than just transferring the home or giving up some type of interest in the home, because the cool thing about a ladybird deed is that you stay in control over that property. So it's in your name, under your control for the rest of your life and then it passes immediately to the next generation or whomever you want to leave it to Upon death, does not go through some long, difficult, expensive probate process and avoids probate where creditor can't just come in. Creditor, like Medicaid, can't just come in and place lien against that home, force the sale of the home and collect money from the home. So you get to pass the home free and clear from any Medicaid liens after you die, no matter how long you've been in long-term care. How much Can I do that.
Speaker 1:
Even, let's say, if it's within that five-year look-back period, even if six months from now I need to go to long-term care, or let's say I need to go right now, can I do a ladybird deed and still qualify for the benefit?
Speaker 2:
and save my house. Certainly, and the reason why you asked the question is because most people are concerned about what you had mentioned before the look back period. Now it's important to understand that look back period, which is three years for assisted living, three years for VA and five years for skilled nursing care, is only triggered, if you will, by a gift, so if you transfer assets out of your name and don't receive fair market value in return for that. So the question then becomes okay, well, under a ladybird deed, are you gifting anything? Are you giving away any value or any interest? And the answer is no.
Speaker 2:
So with a ladybird deed, you stay in control of the property. You still own the property. You can still do whatever you want to with the property. So naming somebody to receive it upon your death immediately like a beneficiary isn't a transfer of any valuable interest in the property. So you haven't gifted anything. You haven't given up your interest in the property. So you haven't triggered a lookback period. So you can do the ladybird deed, whether it's right before you need care, whether it is while you're receiving care or, hopefully, long before that.
Speaker 1:
And I imagine if I wanted to plan ahead well outside of the lookback period, there's other things I could do, like perhaps trust planning Right and other type of deep planning. I could do that outside of that look back period and protect more than just my home, maybe place my home there, other liquid assets there, investment accounts, maybe even other real estate inside of that trust Right accounts, maybe even other real estate, inside of that trust.
Speaker 2:
Right, that's right. You know, with a trust, the cool thing about a trust is that, if it's set up correctly, what you're doing is you're avoiding probate and you're avoiding the ability for any creditor in the estate to go after assets that even pass outside probate. So one of the things that I mentioned before is that not all probate avoidance is equal. There are some things that may avoid probate but can still be brought within the estate to satisfy claims, like a claim from Medicaid.
Speaker 2:
A well-structured trust will protect you from the ability of a creditor to come into. You know those assets bust. The trust come after the assets that pass through the trust. A well-structured trust can also help you actually qualify for a benefit to pay for long-term care at the outset. So you know if you set it up ahead of time, you do it correctly. You can have your assets housed in a trust such that they don't count against you for long-term care purposes. They don't count as an asset you can qualify, and those assets are also protected whenever you pass away so that you can pass them on to your loved ones.
Speaker 1:
Well, thank you, brenton, attorney Begley, for being here with me today to talk about. Does Medicaid or is Medicaid going to take your house? Okay, the answer is yes, but not if you do proper estate planning, and I would prefer that you see a good elder law attorney who can help and is familiar with the tools that need to be used to protect your home and then qualify you for a benefit. Speaking of that, I would be glad to offer a free consult to meet with you or your loved one to talk about how to protect your home in retirement, harder money and property, especially if there's a long-term care situation that's looming in the near or possible future. You can schedule that consult by calling 1-888-999-6600 or by scheduling directly online at mcelderdahlcom slash scheduling. Thanks so much for being here.