The Elder Law Forum by Professor Mike Myers Editor's Note: The Elder Law Forum is a public service of the University of South Dakota School of Law, an extension of the SENIOR LEGAL HOTLINE available at no cost to persons 60 and older at 605-677-6343 and email@example.com during regular business hours. The Elder Law Forum delivers information and educational material by radio, a weekly newspaper column, and Law School research papers placed on the USD School of Law Web site. Professor Myers teaches Elder Law at the School of Law.
The State Will Take the "Family Home"
The "family home" is filled with imagery of safety and security; a place to return to in troubled times; a place of fond memories and childhood dreams. It is a place that is always there, like a mother's arms, warm and comforting.
For most of us, however, the continuation of a multi-generational home, where grandchildren play in the same yard, in the same sandbox, and with the same basketball hoop as did their parents, is but a nostalgic reflection. Most children go off to college, marry, and relocate where the jobs are.
They become modern-day nomads, in search of better jobs, better schools, and better climate. They turn their backs on the old homestead, acquiring ever-larger homes to rear ever-smaller families. On the other hand, there is the involuntary extinction of the family home, shut off by the Medicaid "estate recovery" program.
"Mother wants to keep the home in the family," said a USD Senior Helpline caller (1-800-747-1895; firstname.lastname@example.org). "But the Medicaid officials say we have to sell the house within six months." The caller was a son. He had received conflicting advice on whether the house had to be sold within such a limited time-frame.
"They will give you a three-month extension, but at the end of nine months if the house is not sold at fair market value, the state will sell it at an auction," I advised. The mother, age 86 with health problems, faces a sizable "spend-down." She has a cash flow of $1,690 a month from Social Security and a land contract.
Under the state proposal, she would place in trust the Social Security and land contract payments along with the proceeds of the sale of her home, estimated at $90,000. Nursing home costs were projected at $40,000 a year, which meant the state would not incur an obligation for the first two years.
The dilemma was obvious: either sell the house or face a monthly short-fall of $1,310. On the other hand, if the mother's nursing home stay were to be terminated by an early death or recovery, the "family home" would no longer be in the family.
If, at the end of your life, you dip into the federal-state Medicaid barrel, the government will be waiting to retrieve the monies it has spent on your behalf. There will be no "family home" to return to.