Protect Real Estate From Medicaid

The following article is courtesy of the California Association of Realtors.
DEAR BENNY: Seven years ago, when my mother was 80, my husband and I purchased cooperative apartment shares in a senior complex for her to live in. Since at least one of the tenants had to be over 55, we put her name on the shares, as well as my name. The actual paperwork reads: ” ‘My Mother’s Name’ or ‘My Name’ as joint tenants with right of survivorship and not as tenants in common.”

If my mother needs to move to assisted living or a nursing home, will Medicaid try to get possession of this apartment? I’ve called the co-op’s attorney, senior law offices here in Reno, Nev., and I’ve called private attorneys. No one can give me an answer. One office suggested I call the Medicaid office. As much as I would like to, I think that might give Medicaid an opportunity to take what isn’t hers. We used equity in our home to purchase this apartment. My mom lives on Social Security and could never afford this apartment.
One lawyer suggested the co-op “reconvey” the share back to my name, but their bylaws require that whoever is on the deed live there. Any ideas? Are we safe in keeping this, selling it and keeping the monies, or will Medicaid take it? –Penny

DEAR PENNY: This is a complicated question and I am surprised that the senior law offices were unable to assist. There are a number of “elder lawyers” throughout the country, and you can locate them on the Web. I searched “elder lawyers” and found a number of Web sites that should be of assistance to you.
Generally, however, Medicaid (which is administered by the state, with each state having its own rules) does not “get possession” of property. But if your mother applies for Medicaid, I assume she will need to disclose her interest in the co-op as an asset. It is possible that the state will take into account the fact that she is not an “equitable” owner of the property (as she did not contribute to the purchase price of the property) and simply disregard the asset. But even if she is considered to be an owner for Medicaid purposes, the state may impose only a lien on the property rather than require it be sold. In fact, if the state considers the co-op interest an asset of your mother, it wouldn’t require her to sell it, but could deny her benefits until her assets, including her interest in the house, were spent down to whatever the threshold is in Nevada. Many states allow a number of exceptions. For example, if a disabled family member (or a spouse, which I assume there
is none) is living in the property, the Medicaid applicant would qualify for benefits and a lien would be imposed on the applicant’s share of the property in the amount of any benefits paid — but the benefits would need to be reimbursed when the property is sold or the disabled person or spouse dies. This is a highly specialized area of law, and not all attorneys understand the rules or the law.

Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column.