The Elder Law Minute™ Medicaid’s Home Equity Limit to Rise to $802,000 By Ronald A. Fatoullah, Esq. and Debby Rosenfeld, Esq. The Center for Medicare and Medicaid Services (CMS) released the new home equity limit for 2013. For Medicaid eligibility purposes, individual states can elect a home equity limit of a minimum of $536,000 and a maximum limit at $802,000 (“Home Equity Limit”). New York State has always elected the maximum limit which will rise to $802,000 in 2013. What does the Home Equity Limit mean for our elderly? Let’s revisit basic Medicaid planning strategies where a personal residence is involved. Since 2006, an individual will not be eligible for Medicaid coverage if the individual’s equity interest in his or her personal residence exceeds the Home Equity Limit (see exceptions below). Therefore, we must be mindful of the value of a personal residence when evaluating an individual’s eligibility for Medicaid. It is recommended to obtain an appraisal whenever a non-exempt home is held by the applicant/recipient. There are certain situations where the home will retain its exempt status regardless of its value. If the individual applicant is married and the healthy spouse resides in the home, the home will not be counted for Medicaid purposes. The same rule also applies if a disabled, blind or minor child resides in the home. With regard to nursing home eligibility, the home is deemed exempt if the applicant expressed an intent to return back to the home. However, in such scenario, Medicaid can place a lien on the home in order to reimburse itself for the medical expenses paid on the applicant’s behalf. If, however, the recipient does in fact return home, the lien must be removed. The “intent to return home” can only be utilized if the applicant’s equity interest in the home is under the Home Equity Limit. Accordingly, we often look to see if exempt transfers of the home may apply. Exempt transfers are gifts of the primary residence that will not subject the applicant/ recipient to a Medicaid penalty or waiting period. For example, transfers to individuals such as a spouse, a child under the age of 21 or a blind or disabled child of any age, a “caregiver child,” or a sibling with an equity interest in the home are exempt for Medicaid purposes. A caretaker child is defined as a child who has resided in the home for at least two years prior to the Medicaid application and who “provided care” to the applicant which permitted the applicant to reside at home rather than in an institution. The transfer of a personal residence to a sibling of the applicant who has an equity interest in the home and who resided in the home for a period of at least one year immediately prior to the date the applicant became institutionalized is also be treated as an exempt transfer. It is important to note that any time assets are transferred, especially a home, one must take into consideration the capital gains taxes ramifications. These taxes can be significant and can often be reduced or eliminated with proper planning. For those individuals with a personal residence that have a value that exceeds the Home Equity Limit, other planning strategies can frequently be used in order to obtain Medicaid eligibility. ELDER LAW ROnald Fatoulah, ESQ, CELA* The use of a Medicaid Irrevocable Asset Protection trust is typically the best way to protect the home if it is likely that nursing home care will not be needed for at least 5 years. Ronald A. Fatoullah, Esq. is the principal of Ronald Fatoullah & Associates, a law firm that exclusively concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts and wills. The firm has offices in Forest Hills, Great Neck, Manhattan, Brooklyn, and Cedarhurst, NY. This article was written with the assistance of Debby Rosenfeld, Esq., a senior staff attorney at the firm. Ronald Fatoullah & Associates can be reached by calling (718) 261- 1700, 516-466-4422, or toll free at 1-877-ELDER-LAW or 1-877-ESTATES. 32 North Shore Towers Courier n February 2013 We Care About Your Well Being PHYSICAL THERAPY SERVICE We work with patients who have had joint replacement (hips, knees & shoulder) MEdICARE & MoST InSuRAnCES ACCEPTEd • State-of-the-Art Equipment • nEW Anodyne Therapy for treatment of neuropathies and Circulatory problems • new Laser Light • Joint Pain from Arthritis • Carpal Tunnel Syndrome • Balance Problems — Gait Training • Sports Injury • neck & Back Injuries Zdenko Beg, PT one of Long Island’s Finest Physical Therapists Pouran Salon Med& Spa At north Shore Towers Open Everyday from 8 (By appointment) MedSpa: (718) 225-4100 • Mr. Z: (516) 526-0861 • (718) 224-8480
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