Your house needs to be protected from the nursing home both while you are living and after you die.
During Your Lifetime
When you apply for Medicaid to pay for the nursing home, your house will be protected during your lifetime so long as you indicate on the Medicaid form that you intend to return to your home. Even if it looks clear that you will never return home, mark that you do intend to return home; this is a formality that must be honored to protect your house.
After Your Death
When you receive Medicaid to pay for long term care, the state will try to get repaid for monies spent on your care, through a process called estate recovery. To avoid estate recovery and the taking of your house, you must plan ahead well in advance.
Two Planning Methods
The two most common planning methods are the use of a life estate and an irrevocable trust.
The life estate strategy consists of drafting and filing a new deed to your house; the deed allows you a life estate interest in the house and your beneficiaries own the remainder interest. You own the house when youre alive; your beneficiaries, automatically, own the house at your death. Be aware that this technique is not available in all states so you must get legal advice before you proceed.
The trust strategy is similar; the deed transfers the house into a trust.
In both strategies, the house is outside of your estate; and, is, therefore, not subject to estate recovery.
Because of nursing home transfer look-back periods, the sooner you plan the better; but, never hesitate to get good legal advice from an elder law attorney, even if you think its too late. You can protect your home from the nursing home.