Anyone involved in getting Medicaid for a parent or themselves needs to talk to a lawyer that specializes in elder affairs. The Gov’t generally goes back 5 years from the time a person qualifies looking for transfers of money or property. Setting up a life estate is one way of getting around having the Gov’t seize property. Once you get past the 5 year window, the Gov’t can’t seize anything. Best advice for those with aging parents, get property in a life estate ASAP.
As far as getting a lawyer involved, the nursing homes will provide legal services for free that will get a patient qualified for Medicaid, and they pretty much guarantee they can do it. However, they’re not necessarily concerned with what happens after the patient dies, which is when the Gov’t will come after property.
An independent lawyer who specializes in elder affairs will work to set things up so the Gov’t has minimal chance of seizing assets. In my experience you can expect to pay $3K at a minimum, but having someone with experience in this area is worth a lot.
I was told back in the ‘90s when my mother was in a nursing home, and recently when a sibling on Medicaid/disability was in a nursing home for a few months, to refuse to sign anything and when asked how much help you’re willing to give, say “nothing”. It’s not a good idea to open that door.
In my state, they passed a law that eliminated the protection of a life estate and they now freeze the value of the life tenant’s interest as of the date of death, and then they claim a lien on that percentage.
So if a 84-year old dies, and say he would be assigned 37% of the value based on his life interest, that is the extent to which the lien would be effective.
It totally changed common law which previously did not allow a lien on a life interest, because the life interest disappears on the death of the life tenant.
Strange times.