If Mom Goes on Medicaid, What Happens to Jointly Owned Home?

If you live in Connecticut and your mother put your house jointly in her name, your name, and your husband’s name nearly five years ago, you are not alone in wondering how Medicaid and estate recovery might affect your family home. This is a common concern for families planning for long-term care and hoping to protect their home from being lost to nursing home costs.

Key Legal Issues

• Medicaid Estate Recovery: After a Medicaid recipient dies, the state is required to seek repayment for certain Medicaid benefits paid on their behalf, including nursing home care, from their estate.
• Joint Ownership: When a house is owned jointly, only the Medicaid recipient’s share is subject to estate recovery.
• Timing of Recovery: The state’s ability to recover depends on how the property is titled and what happens to your mother’s share after her death.

How Medicaid Estate Recovery Works in Connecticut

1. The Five-Year Lookback Period

Connecticut Medicaid has a five-year “lookback” period. This means that if your mother transferred her interest in the house to you and your husband less than five years before applying for Medicaid, the transfer is penalized, and she should be ineligible for Medicaid coverage for nursing home care. It may be beneficial to wait until five-year post-transfer before applying for Medicaid.

2. What Happens When Your Mother Passes Away?

• Estate Recovery Applies to Her Share: After your mother’s death, Connecticut’s Medicaid program will seek to recover the costs of her care from her estate. In the case of a jointly owned house, only her one-third interest is subject to recovery.
• How Recovery Is Enforced: The state can place a claim or lien against your mother’s share of the property. However, the timing of when the state actually receives payment depends on what happens to her share after her death.

3. Immediate Payment vs. Delayed Recovery

• Not Immediately Owed: You and your husband are not required to pay the state immediately upon your mother’s death. The state’s claim attaches to her one-third interest in the property.
• When the House Is Sold: The state will typically collect its share when the house is sold or otherwise transferred. If you and your husband continue to own and live in the house, the state’s claim remains attached to your mother’s former share but does not force a sale.
• If You Outlive the House: If you and your husband continue to own the house until your own deaths, the state’s claim would be paid out of your mother’s share when the property is eventually sold or transferred to your heirs.

4. What If You Never Sell?

• Claim Remains: The state’s claim remains attached to your mother’s one-third interest. If you never sell the house, the claim may remain unresolved until the property is eventually transferred (for example, when your children inherit the house after you and your husband pass away).

Important Considerations

• Surviving Spouse or Disabled Child: If your mother had a surviving spouse or a disabled child living in the home, recovery would be delayed until after their death.
• Probate vs. Non-Probate Assets: Connecticut generally limits estate recovery to assets that pass through probate. If your mother’s share passes automatically to you and your husband by right of survivorship, the state may still assert a claim, but you may be able to successfully challenge the assertion.
• Hardship Waivers: In some cases, heirs can apply for a hardship waiver to delay or reduce recovery if enforcing the claim would cause significant hardship.

Practical Example

Suppose your mother is a Medicaid recipient and then passes away while the house is still jointly owned by you and your husband. The state files a claim for her one-third share. You and your husband continue to live in the house. The state does not force you to sell. Years later, if you decide to sell the house or after you both pass away and your children inherit, the state will expect to be paid from your mother’s one-third share at that time.

Key Takeaways

• You are not required to pay the state immediately upon your mother’s death.
• The state will recover its share when the house is sold or transferred.
• If you never sell, the claim remains until the property is eventually transferred to someone else.

Next Steps

• Keep records of the property’s ownership and any communications from Medicaid.
• Consult an elder law attorney in your area for personalized advice, especially if you plan to sell or transfer the property in the future.