Can The Government Take My Home if My Spouse or I Go Into A Nursing Home or Need Long-Term Care?

This may shock you, but the short answer is yes, it is possible you could lose your home if either you or your spouse go into a nursing home.

Find out how you can safeguard your most precious asset and secure your future.

As we reach our golden years, concerns about long-term care become increasingly relevant. One of the biggest worries for married couples is the potential loss of their home if either spouse needs to enter a nursing home. It's natural to wonder: Can the state really take away our beloved home?

Odds Are, You and Your Spouse Will Need Care

According to government statistics, approximately 72% of people over age 65 will need some form of long-term care. Care includes home health aides, assisted living and even skilled nursing home care. The average length of care for a man is 2.2 years and the average length of care for a woman is 3.7 years.

Long-Term Care Costs are Skyrocketing. In 2021, the national average monthly cost of a nursing home was over $8,000 a month. In Minnesota, it was averaging over $11,000 per month for a shared room and over $13,000 for a private room. On the gulf coast of Florida, the average costs were over $10,000 per month. And costs are rising faster than inflation.

Government Benefits for the Middle Class

With costs potentially exceeding over $1 million for the average married couple, government benefits is the #1 way middle class families are covering these costs. Specifically, a government program known as Medicaid, or also sometimes referred to as Medical Assistance.

Understanding Medicaid Eligibility

To determine whether the state can seize your home, it's crucial to understand Medicaid eligibility rules. The government wants you to spend almost all of your own assets first. Therefore, it has strict income and asset limits that need to be met before you can qualify for benefits.

Home Equity Limits

Both Minnesota and Florida have specific rules regarding home equity limits when it comes to Medicaid eligibility. These rules aim to prevent individuals from transferring their assets to qualify for Medicaid while still retaining substantial wealth.

If the equity in your home is over the equity limit, the excess equity needs to be used to pay for care. However, even if your home is under the equity limit, the government may still be able to take it. If you are single, need care, and are unable to return home, your home is now an available asset that the government can take to pay for your care.

If you are married and your spouse goes into a nursing home, your home is protected as long as you do not need care and it is under the equity limit. However, if you later need care and can’t return, then your home is an available asset. Even if you never require care, the government can place a lien on your property for benefits provided to your spouse. When you pass away and your home is sold, they can take the proceeds from your home. This is known as estate recovery.

Planning Ahead - Trusts and Estate Planning

To safeguard your home and assets further, it's essential to engage in proactive estate planning strategies. Federal law allows you to do planning ahead of time, which can protect your home and life savings from needing to be spent down prior to receiving benefits, and from the state taking your home and savings after your passing for benefits you or your spouse received.

Consult with an Elder Law Attorney

Navigating Medicaid rules and planning for long-term care can be complex. Consulting with an experienced elder law attorney who specializes in Minnesota or Florida laws is crucial. They can guide you through the intricacies of asset protection, help you understand the nuances specific to your state, and help ensure you make informed decisions that align with your goals.

By understanding the rules specific to your state, taking advantage of spousal protections, and engaging in proactive planning strategies, you can secure your most cherished asset and enjoy peace of mind during your golden years. Remember, knowledge is power – so take action today!

If you would like to schedule a consultation to discuss how you can protect your home and life savings from long-term care and nursing home costs, contact us today at our Minnetonka office at (763) 420-5087, or our Gulf Coast, Florida office at (941) 909-4644.

If you would like to learn more, click here to download our free guide "Save Our Home: How to Protect Your Home and Life Savings From Long-Term Care and Nursing Home Costs".
Chuck Roulet
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Nationally Recognized Estate Planning Attorney, Author, and Speaker