The Listen to Lawrence Letter: Is the home exempt from Medicaid?

April 5, 2024
April 4, 2024 • Volume 5 Issue 232
Is the home exempt from Medicaid? Read on:


If our house is in a revocable trust, can New York State recoup any money when my trustees’ (my children) sell the house in the revocable trust after my death, if one or both of us had been on Medicaid?

Thank you.


The answer is probably no, but this could be confusing. Let’s start by stating that as long as the spouse is living in the house, the house is considered an exempt asset. This will be true whether the house is held by either spouse, jointly or individually, or it is held in a revocable trust. While it may be possible, in some circumstances, for Medicaid to recoup from the estate of the surviving spouse, the “estate” will be limited to the probate estate. Since the assets in the revocable trust avoid probate, New York State will have no right to recoup.


Note that after the first death, the house will remain exempt from Medicaid as long as the surviving spouse stays out of a nursing home. If the surviving spouse ends up in a nursing home, then the home will no longer be exempt and the revocable trust will not prevent Medicaid from putting a lien on it to protect Medicaid’s right of reimbursement. Only an irrevocable trust would help in this situation.

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