What options are available for sheltering proceed, from the sale of real estate, for a medicaid recipient?

Asked on September 12, 2012 under Estate Planning, Illinois


Catherine Blackburn / Blackburn Law Firm

Answered 8 years ago | Contributor

The answer to your question depends in part on your state's laws and regulations.  Your question implies that the "medicaid recipient" is already approved for and receiving Medicaid benefits.  It does not say whether the recipient is over 65 years old and in a nursing home, and it does not say whether the real estate belonged to the recipient or the recipient is supposed to receive some of the proceeds.  These factors are extremely important and make the answer quite different.

In general, a person already receiving Medicaid has an obligation to report new assets or income to the Medicaid agency.  If the assets or income put the person over the limits, he or she must spend or redirect the funds in an approved way by the end of the month or the recipient will be removed from Medicaid benefits.

It would be very useful to consult an Elder Law attorney before the real estate is sold, if possible, to plan how the proceeds will be distributed.  Even if the recipient is a young person, an Elder Law attorney is well versed in Medicaid rules and regulations and can assist.  Most Elder Law attorneys practice the full range of trust and estate law and can assist in creating a special needs trust, for example, that could be used to keep a younger person eligible for Medicaid.

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