Q: Medicaid lien concern on grandmother's house with me as beneficiary in NY
I am concerned about Medicaid and asset protection regarding my grandmother's house. My grandmother is sickly and requires more care than I can provide. Her daughter wants to apply for Medicaid and get her on the assisted living waiting list. My grandmother's only major asset is her house, which is worth over $30,000, where both she and I have lived since I moved back in June 2024. I am her beneficiary in her will and have power of attorney. There are no other financial obligations or assets, and my grandmother sold her car, transferring approximately $12,000 to me for home improvements. I want to continue living in the house since it's my childhood home. Would Medicaid place a lien on the house if she enters assisted living and I assume her mortgage of $77,000? Or would it be better for me to buy the house outright to prevent any complications?
A:
I completely understand your concern—Medicaid rules can be tricky, and it’s important to plan ahead so you don’t run into issues later. Since your grandmother owns the house and may go on Medicaid for assisted living, there is a real possibility that Medicaid could place a lien on the home to recover costs after she passes. But there are ways to protect the house and your ability to stay there—so let’s go over your options.
Will Medicaid Put a Lien on the House?
Possibly. Here’s how it works:
If your grandmother goes on Medicaid and moves out, Medicaid could place a lien on the house.
They won’t force a sale while she’s alive, but after she passes, they might require the house to be sold to repay the cost of her care.
Since you’ve only been living there since June 2024, you don’t yet qualify for an exception that could protect the home (like the “caregiver child” rule, which requires two years).
Would Buying the House Prevent This?
Maybe, but only if it’s done right:
If you buy the house for full market value, it removes it from her name, so Medicaid can’t go after it.
But if you buy it for less than market value, Medicaid could see that as her “giving away” assets and penalize her eligibility.
If she sells the house and keeps the money, that money would count as an asset and could make her ineligible for Medicaid until it’s spent down.
Are There Other Ways to Protect the House?
Yes! Here are a couple of common options:
Transfer to a Trust – If she puts the house in a special Medicaid Asset Protection Trust, it could be safe after 5 years (but this only works if done early).
Life Estate – She keeps the right to live in the house, but after she passes, it goes to you instead of Medicaid.
What Should You Do?
Medicaid rules are strict, and doing this wrong could cost you the house. The best move is to get legal advice before applying for Medicaid so you can:
Figure out the best way to keep the house safe
Make sure Medicaid doesn’t delay her care
Avoid mistakes that could cost you money
We handle these kinds of cases all the time and can walk you through the best strategy for your situation.
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