With proper planning, a primary residence can be protected from the Nursing Home.

When a widowed or single individual seeks Medicaid benefits, Medicaid
requires that they spend their available assets down to $2,500.00 before
receiving such benefits. If a person enters a nursing home without a reasonable
expectation to return to their primary residence, Medicaid will expect them to
sell their residence to pay for nursing home care.

Medicaid examines all gifts made within five years of a person applying for
the program. As a result, if a senior tried to transfer a home outright to
their loved ones before entering a nursing home they may be subject to a
penalty period for which Medicaid will not cover nursing home costs.

If a spouse enters a nursing home, the “community spouse” is able to
continue living in the house.

 “Deed with a life estate remainder”
is among the most common techniques for elder law asset protection planning.
The transfer of a remainder interest is simple and noninvasive compared to
other techniques. Requirements include the preparation of a new deed and
associated real estate transfer documents. No realty transfer tax is imposed
because this gift is a transfer without consideration. The “step up in basis”
rule was reinstated by the tax bill signed by President Obama on December 17,

The grantor would transfer the house to his or her children while retaining
the rights to live in the house during his or her lifetime. The life estate
technique assures the life estate holder that nothing has dramatically changed.
Legally, she is obligated to pay all expenses of regular maintenance, upkeep,
and property taxes, in addition to being able to deduct these.

Whoever holds the Life Estate is entitled to all rents from the property and
to exclusively occupy the premises, without fear of eviction. The holder of the
Life Estate is also protected against the remainderman’s creditors. When
retaining a Life Estate in the property, you are not transferring or giving the
entire interest in the property away, rather, giving the remainder persons the
right to own the property after you died.

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