Joint tenancy with right of survivorship is a rather wordy term that describes the condition of multiple people jointly owning a piece of property.
If you were to pass away as the sole owner of property it becomes probate property. The heirs to the property would not receive their inheritances until the estate had been probated. This process can be time-consuming and expensive.
This provides an incentive to utilize joint tenancy. If you had a joint tenant who owned the property along with you, after you die he or she would assume sole ownership of the property outside of probate.
Medicaid Recovery in Davenport Iowa
Now that you have absorbed the necessary background information let’s look at Medicaid recovery. If you use Medicaid to pay for long-term care as a homeowner, the program can seek reimbursement from your estate after you pass away.
Traditionally, the Medicaid recovery unit could only go after probate property. Therefore, if you owned property in joint tenancy with others, the joint tenants would assume ownership of your share of the property after you died.As a result, Medicaid would not be able to attach the value of the home.
This was true until theOmnibusBudget Reconciliation Act of 1993 was passed. Provisions contained within this measure gave states the right to seek recovery by attaching certain non-probate assets.
Some states take full advantage of this opportunity, and others do not. As a result, there is no one answer with regard to the effectiveness of joint tenancy when it comes to the prevention of Medicaid recovery.
Problems With Joint Tenancy
Even if there was a good chance that the joint tenants would inherit the property that you placed into joint tenancy without encumbrances, there are still some negatives to consider.
For one thing, the joint tenant’s creditors could seek to attach the property, even if he or she contributed nothing into it.
A second pitfall would be the fact that you could not sell the property unless the joint tenant agreed to sell his or her share in the property as well. Since the joint tenant stands to inherit all of the property, he or she may stand in the way of the sale.
There is also the matter of disinheritance. To provide an example, let’s say that you tell the joint tenant that you want the house to be sold immediately after your passing. Once the value is liquid, you want the person who served as the joint tenant to distribute these resources among multiple family members.
From a legal standpoint, there is nothing forcing the surviving joint tenant to follow these instructions.
If you’re interested in protecting your home from Medicaid recovery in Davenport Iowa, make no assumptions with regard to joint tenancy. Talk everything over with a licensed Davenport elder law attorney so that you know all the facts before you take any action.