By: Nicholas N. Khayumov

For many individuals, their home is their most cherished asset. Whether it’s a co-op apartment, condo, or house, it often represents a lifetime of memories and is at times their most valuable investment. As people age, ensuring that the value of their home is preserved and passed down to their loved ones becomes a primary goal.

One of the most significant expenses in aging is the cost of long-term care, whether the care is provided in a person’s home, an independent/assisted living facility or in a skilled nursing facility. While Medicare covers various healthcare services such as doctor’s visits and surgeries, the coverage does not extend to long-term care. This gap often forces individuals to sell or borrow against their homes to be able to privately pay for the care that they need. This also often leads individuals to seek Medicaid, a needs-based program, to cover the care they require.

However, Medicaid has stringent asset requirements. In 2024, the resource limits are $31,175 for individuals and $42,312 for a married couple. Although these limits may seem restrictive, there are exemptions available, one of the most notable being the homestead exemption. The homestead exemption allows the value of a person’s home to be excluded from the asset calculation, as long as the equity of the home is below the equity limit for the homestead exemption (currently $1,071,000).

While the homestead exemption can prove useful for those who need Medicaid to access long term care, but do not want to sell their home, it comes with certain conditions, primarily related to Medicaid’s Estate Recovery Program. Essentially, after a Medicaid recipient’s death, Medicaid can claim against the assets of their estate to recover the costs of care provided. Therefore, even though a home might qualify for the homestead exemption and allow the recipient to access Medicaid services during their lifetime, its value can still be subject to Medicaid’s estate recovery after their death.

With proper planning, families can at times minimize or even avoid Medicaid’s estate recovery thereby preserving the Medicaid recipient’s estate plan. Without such planning, families may be shocked to discover the extent of their loved one’s estate debt to Medicaid.

At Littman Krooks LLP, we understand the complexities of Medicaid planning and the profound impact it can have on our clients’ lives. Our experienced team is committed to helping individuals and families navigate these challenges with compassion and expertise. To ensure that the home you or your loved one worked so hard to build is protected, we encourage you to contact our office and schedule a consultation.