Consider Carefully Before Buying A House With Someone Who May Need Medicaid

Friday, March 5, 2021

    It is not uncommon for people to buy a house together with an elderly relative.

    This can provide a young family with a larger home in a better area than they might otherwise be able to afford, and it can provide a built in social or even physical support system for the elder.
    Things can get complicated if the elder ever needs to qualify for Medicaid.

    In some circumstances, it may be possible to transfer the elder’s interest in the home to the younger folks without Medicaid consequences if one of the younger folks is a child of the elder, and if certain other conditions are met.

    In many cases, however, this will not be possible.

    In that circumstance, people are sometimes told that the house needs to be sold before the elder will qualify for Medicaid if the elder ever needs long term care.

    This is often incorrect, since Medicaid cannot force the sale of property that is co-owned by a Medicaid applicant or recipient and most third parties.

    However, it is true that once the Medicaid recipient dies, the Estate Administration Unit (the folks who seek repayment to the state for amounts that have been paid by Medicaid), can then force the sale of the property.  At that point, the State of Oregon can force the entire amount that was paid through Medicaid, up to the total of the deceased Medicaid recipient’s share of the property, to be paid from this sale of the property if the co-owners are not able to pay the state this amount themselves.

    It is wise to consider these things before entering into a co-ownership relationship.