Can I Transfer My Parents’ Home to Me and Avoid a Medicaid Lien?

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Avoid a Medicaid Lien

Transferring your parents’ home into your name may seem like a straightforward way to manage their assets, but when Medicaid is involved, it becomes more complex. If you’re considering this to avoid a Medicaid lien because of nursing home or other long-term care costs, you need to understand the rules under Oklahoma law.

Understanding Medicaid Liens and Estate Recovery

In Oklahoma, Medicaid has a right to recover payments made for a beneficiary’s care from their estate after their death. This process is known as estate recovery. If your parents receive Medicaid assistance for long-term care, the state can place a lien on their home to recover these costs. The key to avoiding a lien lies in planning the transfer correctly and understanding the exemptions that might apply.

Timing Matters: The Five-Year Look-Back Period

Medicaid applies a five-year look-back period to any asset transfers. This means if your parents transfer their home to you within five years before applying for Medicaid, the state views this as a means to reduce their assets to qualify for benefits. From a practical consideration I have seen the lookback period extended as far back as ten years so be careful. This type of transfer can lead to penalties, including a period of ineligibility for Medicaid.

Exceptions to the Rule

There are several exceptions to the penalties associated with transferring a home. These exceptions can provide lawful ways to transfer property without affecting Medicaid eligibility:

  • Caregiver Child Exemption: If you lived in the home with your parents for at least two years before they moved to a nursing home and provided care that delayed the need for nursing home care, you might qualify to receive the home without penalty.
  • Sibling Exemption: If your sibling maintains an equity interest in the house and has lived there for 1+ years prior to your parent’s admittance to a nursing home, the property can be transferred to them without penalty.

Legal Tools and Planning

Using legal tools such as trusts or personal care agreements can also play a role in asset management and protecting the home from a Medicaid lien. For instance, an irrevocable trust might be used to hold the property, removing it from your parents’ direct ownership and potentially protecting it from estate recovery, provided it’s done outside the look-back period.

Consult a Professional

It’s wise to consult with a Medicaid planning / elder law lawyer. They can provide tailored advice based on your specific circumstances and help you navigate the legal requirements effectively. This ensures that you are making the best decisions not only for asset protection but also for maintaining Medicaid eligibility.

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Tulsa Elder Law Lawyer

Transferring your parents’ home to avoid a Medicaid lien involves careful legal consideration and planning. Understanding the look-back period, utilizing exemptions, and possibly employing trusts or other legal structures are all part of a strategy to protect assets while ensuring that your parents receive the care they need. Always seek professional advice to handle this process successfully. Kania Law Office can help you manage complex Medicaid planning issues. Reach out to Kania Law Office at (918) 743-2233 or contact us online to discuss your situation.

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