For many clients, their home is their most valuable asset, and the one they are most anxious to protect. Sometimes these clients have heard “don’t worry, the home is exempt.”

In fact, such statements are very misleading. When applying for Medicaid home care, your primary residence is not a “countable resource” if your equity in the home does not exceed $1,071,000 (in 2024). However, once the home is no longer your primary residence, Medicaid will put a lien against it, and ultimately recover the cost of the services that it provided from your equity in the home. Of course, once you sell or move out of the home (because, for example, you moved into a nursing home, or you passed on), it is no longer your primary residence and it is immediately at risk.

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If we are working on a Medicaid plan for a client who owns a home, we will be taking steps to transfer ownership of the home. Typically, the home will be transferred to trust for various reasons (click here to read more about trusts). These reasons include avoiding capital gains tax on the increase in value that accrued during your lifetime.

Real property that is not your primary residence, such as a second home, a time share, or an interest in land purchased by your ancestors, is a Medicaid resource, and must be transferred in order to gain eligibility.

Transfer of your home or other real estate may be an important part of your estate plan, even if you are not applying for Medicaid.

Lamson & Cutner is well equipped to assist you with the sale or transfer of real estate, whether you own a single family residence, a multi-family residence, raw land, or a condo. We also assist with transfers of ownership of co-op apartments, although co-op’s are not real estate and transfers of ownership require permission from the co-op board.

Elder Law strategies will often involve transferring real estate out of your name, so it will not be counted as one your “resources” for Medicaid eligibility purposes, or become subject to a Medicaid lien or claim.

If you transfer your house, condo or co-op to someone else such as a child, or into a Trust, a new Deed will need to be prepared and filed. The real estate will now belong to someone else or to the Trust, and will no longer belong to you. However, you can still be permitted to live in your home. Whether you are transferring or selling your real estate, Lamson & Cutner can prepare and file all deeds as appropriate as part of its services.

Download our Estate Planning Handout

If you are elderly or disabled and need long-term care, and you live in a house in New York State, there are steps you can take to protect its value, and still obtain government benefits to pay for your care.

If you are able to remain in the community, and your care will be in your home, there are a few things to understand. First, Medicaid won’t make you leave your house or sell it, and they will provide services to you, if you have used up all your other financial resources and are still living in your home. However, if you do no planning, Medicaid is authorized to place a lien on the proceeds of your home equal to the value of the services they provide to you. Once you move out of the house or sell it for any reason, Medicaid can enforce its lien.

Download our Estate Planning Handout

Is there anything you can do to avoid this? The answer is yes. If you transfer the title to your house into a properly-drafted asset protection trust (sometimes called a "Medicaid Trust"), it will no longer be your property. This will protect the value of your home against future creditors, including Medicaid. You can specify in the Trust Agreement that you have the right to continue to live in your house.

The best aspect of this situation is that if you are receiving Community Medicaid, which includes home care or assisted living, there is no “look back” for transfers. You can become eligible for Medicaid soon after you transfer your assets into the Trust.

If you move out of the house and it is in a Trust, your Trustees can keep it or sell it. If they sell it, the proceeds will be paid to the Trust, and can be used to supplement your lifestyle and care. If the home is ultimately transferred from the trust to the beneficiaries upon your death, the beneficiaries will receive a "step up in basis" to fair market value, thereby avoiding Capital Gains tax on any appreciation in value that accrued during your lifetime.

If you decide to sell your house during the course of your Elder Law planning, our firm can represent you in negotiating a contract of sale, and can also represent you at closing.

More can be found about this process under “Medicaid Trust,” or you can find what steps might be applicable to your specific circumstances under “Find Your Situation.”

If you are elderly or disabled and need long-term care, and you live in a condominium in New York State, there are steps you can take to protect its value, and still obtain government benefits to pay for your care.

If you are able to remain in the community, and your care will be in your home, there are a few things to understand. First, Medicaid won’t make you leave your condo or sell it, and they will provide services to you, if you have used up all your other financial resources and are still living in your home. However, if you do no planning, Medicaid is authorized to place a lien on the proceeds of your home equal to the value of the services they provide to you. Once you move out of the condo or sell it for any reason, Medicaid can enforce its lien.

Download our Estate Planning Handout

Is there anything you can do to avoid this? The answer is yes. If you transfer the title to your condo into a properly-drafted asset protection trust (sometimes called a "Medicaid Trust"), it will no longer be your property. This will protect the value of your home against future creditors, including Medicaid. You can specify in the Trust Agreement that you have the right to continue to live in your condo.

The best aspect of this situation is that if you are receiving Community Medicaid, which includes home care or assisted living, there is no “look back” for transfers. You can become eligible for Medicaid soon after you transfer your assets into the Trust.

If you move out of the condo and it is in a Trust, your Trustees can keep it or sell it. If they sell it, the proceeds will be paid to the Trust, and can be used to supplement your lifestyle and care. If the home is ultimately transferred from the trust to the beneficiaries upon your death, the beneficiaries will receive a "step up in basis" to fair market value, thereby avoiding Capital Gains tax on any appreciation in value that accrued during your lifetime.

If you decide to sell your condominium during the course of your Elder Law planning, our firm can represent you in negotiating a contract of sale, and can also represent you at closing.

More can be found about this process under “Medicaid Trust,” or you can find what steps might be applicable to your specific circumstances under “Find Your Situation.”