How do I best protect my grandmother’s property in case she becomes infirm and must go into a nursing home or long term facility?

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How do I best protect my grandmother’s property in case she becomes infirm and must go into a nursing home or long term facility?

My mother is 81 yrs old and is a widow. She lives in her own home which she has owned for 40 years. In her Will all of her estate is left to me, her only child. She is the last of her family, no cousins, siblings, etc. She would ultimately like the property to be available for my 16 year old son, her only grandchild.

Asked on September 5, 2012 under Estate Planning, Missouri


Catherine Blackburn / Blackburn Law Firm

Answered 10 years ago | Contributor

How best to protect your mother's property depends on the Medicaid rules in your state.  I recommend that you consult an Elder Law attorney as soon as possible to make sure you have the proper documents in place in the event your mother requires nursing home care.

Most long term care facilities are too expensive for individuals to pay out of pocket.  The average monthly cost for a semi-private nursing home room in Florida is $6,780.  This exceeds $81,000 per year.  It is easy to see why almost all residents require assistance sooner or later.

Medicaid pays for long term care in nursing homes but has strict (and low) monthly income and total asset limits.  It certainly is possible for your mother to spend all of her money, sell all of her assets including her home, and then apply for Medicaid assistance.  This is not, however, required.

Each state exempts some assets from counting for Medicaid purposes.  In Florida, the family homestead is exempt.

Each state also permits seniors to transfer some assets for approved purposes and still qualify for Medicaid assistance.  For example, Florida permits seniors to pre-pay for a funeral and burial, contract for necessary personal services, invest in income-producing property, purchase specific types of annuities, or place funds in a pooled trust.  Other states allow similar transfers.

What is not allowed in any state is GIFTS.  Under federal law, most states must "look back" over the past 5 years to see if a Medicaid applicant has made gifts in order to qualify for Medicaid.  It is, therefore, important that seniors do not give away substantial amounts of money or valuable assets without consulting an Elder Law attorney.  If your mother has made such gifts, I recommend that you and she consult an Elder Law attorney about the effect of these gifts.

Elder law attorneys are well versed in the Medicaid rules.  When it is time to enter a nursing home, they can assist to preserve assets and apply for Medicaid benefits.  Even if the senior's monthly income exceeds the state Medicaid limit, Elder law attorneys can usually structure the monthly income to qualify for Medicaid benefits (this is accomplished in Florida through a "qualified income trust.").

Elder law attorneys can also assist before nursing home care is needed.  They can review or prepare legal documents to make sure they are consistent with Medicaid eligibility rules and allow sufficient flexibility to preserve assets.  This is why I recommend that you and your mother consult with such an attorney now.  She will save thousands of dollars by taking steps in advance of her need.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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