One of the biggest transitions a person may make in their lifetime is moving from their house into a nursing home. Of course, a nursing home can be a great new residence, especially for someone with advancing needs as they age, but it can be a difficult transition, nonetheless. There is a great deal to adjust to and there will also be many logistical hoops to jump through. It will come with other big decisions as well. For instance, what should a person do with their home when they move into a nursing home or assisted living facility? It is an important question with potentially large sentimental and financial implications. Let’s take a look at some of the considerations here regarding what should be done with a house when moving into a nursing home.
Should You Sell Your House If You Are Moving to a Nursing Home?
In some instances, a person moving into a nursing home may not need to do anything with it. For instance, if a spouse or other dependent family member is to remain living in the house, then sale will not be something that needs to happen. Additionally, in such situations, the house will not count against the person moving into the nursing home for Medicaid eligibility purposes.
In other circumstances, it may simply be too expensive to keep the house and move into a nursing home. The mortgage and property taxes would still need to be paid and would not make much sense if no one lived there. Renting out the property could be logistically difficult to manage for someone moving into a nursing home and the rental income could end up penalizing them anyways for Medicaid eligibility purposes.
Selling the home may be an option and there are benefits to be considered, but also potentially negative consequences to be weighed. Selling the home can generate proceeds to use for making the transition to the nursing home. Moving costs and move-in costs can end up being pretty expensive and the proceeds from the home’s sale would help. There would also be no more mortgage on the home to pay off which would reduce monthly expenses as well as avoid anyone having to pay for the homes up-keep and maintenance. The money from the sale of the home could also pay for a significant chunk of time in the nursing home.
The sale of the home, however, could have an adverse impact on the person’s Medicaid individual. While a homeowner occupies a residence, it is considered to be an exempt asset by Medicaid. Upon a home’s sale, however, the sale proceeds are not considered to be exempt and will, therefore, be included in Medicaid eligibility calculations. If the sale occurs within Medicaid’s lookback period, then a penalty period is likely the result. If outside the lookback period, the individual will likely need to find a way to “spend down” the sale proceeds in order to qualify for Medicaid.
Elder Law Attorney
Are you or a loved one thinking about moving into a nursing home? The team at Monk Law can help answer your questions related to this big change. We can also help evaluate how the sale of the home may impact Medicaid eligibility. Contact Monk Law today.