What Will Happen to the Family House

if You Enter A Nursing Home?

By Beth Shapiro, Esquire

People who are thinking about the possibility of nursing home care, either for themselves or for a family member, often have questions about what will happen to the family home if they or their relative enter a nursing facility.  This month’s article discusses some of these questions.

Is it true that I have to turn my house over to the nursing home when I move there?

Absolutely not.  If the state is going to help pay for your nursing care through a Medical Assistance Nursing Home Grant, you may have to give some or most of your income to the nursing home each month.  You do not have to sign over the deed of your house to receive nursing home care.

Will the state try to take my house while I’m in the nursing home?  No.  The state will not do anything to your house while you are living in the nursing home or anywhere else.  The state has a program called “Medical Assistance Estate Recovery” through which it tries to recover the money it paid for long-term care (nursing home-type services).  Medical Assistance Estate Recovery happens only after the recipient of long-term care has died.

What is Medical Assistance Estate Recovery?  The law requires that Pennsylvania try to reimburse itself for the long-term care services provided to people 55 years of age or older in certain situations.  Pennsylvania keeps track of the amount it pays for long-term care through the Medical Assistance program and adds up the “debt” after the death of the person who received care.  The state then tries to collect money or assets from the deceased person’s estate to repay the debt.  Long-term care may have been provided in a nursing home or through the Aging Waiver or LIFE programs.  The Department of Public Welfare is responsible for collecting the money.

What is an estate?  An estate is the property owned entirely or in part by a person after the person’s death.  For the purpose of Medical Assistance Estate Recovery, only the probate estate matters.  The probate estate is what would pass by will or by law (for example, if the person does not have a will) to other people after the owner dies.

I don’t own anything but my house and I want to leave that to my children.  Will the state still take it?  The state has a legal right to recover money from your house even if you have a will giving it to your children.  However, there are situations in which the state should not try to collect the debt.

Who Can Keep the House After My Death? 

What if my husband or wife is still living in the house?  The state should not try to take your house as long as you have a spouse, a child less than 21 years old, or an adult child who has a disability.  It doesn’t matter if the person is living in the house or not.

What if both my name and my spouse’s name are on the deed?  If the deed says “tenancy by the entireties” or “joint tenancy with right of survivorship,” your spouse will get the house free and clear when you die.  The state will not try to recover any money from the house.  If the deed is in both your names but does not have these words written on it, talk to a lawyer.

What if only my name is on the deed?  If the deed is in your name only, nothing will happen to the house until your surviving wife or husband dies, your disabled son or daughter dies (or is no longer disabled), and all your children have turned 21 years of age.  When all of these things have happened, the state may try to recover money from the house.

What if only my spouse’s name is on the deed?  Then you do not legally own the house.  However, if your spouse dies before you and leaves you the house, the house will pass to you and you will legally own it.  If you receive long-term care services through the Medical Assistance program while you own the house, the state may try to recover from it after you die.  If your spouse’s name is on the deed and you die first, the house will not be part of your estate.  In that case, the state will not try to recover any money from the house after your death.

We never really “got married” but we lived together as husband and wife.  Do these rules still apply to us?  Yes, if you can show that you married under common law before January 1, 2005.  Talk to a lawyer about how to do this. 

Rules for Transferring Property

Can I give my house away before I enter the nursing home?  Yes, but the law limits to whom you can give your house.  You can transfer title (ownership) to your husband or wife, your child who is under 21 years old, or your adult child who is disabled.  It is also legal to transfer title to your brother or sister if that person already owns part of the house and has lived in it for at least a year before you get Medical Assistance for long-term care.  Finally, it is legal to transfer title to your adult son or daughter who has lived in the house with you for at least two years before you move to a nursing home and has cared for you so that you could stay at home longer.

How do I transfer title?  It is very important that you talk with a lawyer before you try to transfer title.  You could have “tangled” title problems that make it difficult for the house to be transferred legally.  Also, you want to make sure that you transfer title in a way that protects your right to live in the house and manage it until you move somewhere else.

I am not sure who owns the house because it was passed down by family members.  Can I still give the house to my children who have been taking care of me?  They will not legally own the house unless title to the house has been transferred to them according to the law.  Talk to a lawyer about how to do this.  Unless the house is properly transferred or the state forgives the debt through a hardship waiver (see below), the state will try to collect the Medical Assistance debt after your death.

Can I sell my house to my children or anyone else?  Yes.  If you sell it for fair market value (what it is worth), the state will not try to take your house.  However, the money you receive from the sale, after expenses are taken out, may affect your eligibility for Medical Assistance.  Talk to a lawyer about how to plan for the sale and the effect on your eligibility.

Other Important Information

Can I give my house to anyone else so the state will not take it?  No.  The law does not allow you to avoid Medical Assistance Estate Recovery by transferring title to a relative (except as described above) or anyone else unless they pay fair market value for it.  Talk to a lawyer if you have questions about this.

What if I die without legally transferring title to my daughter who cared for me until I moved to the nursing home?  Can she keep the house?  The state will forgive the debt and let her keep the house if she meets three conditions: 1) She must have lived in the house at least two years before you moved to a nursing home or while you were receiving home care through the Aging Waiver or LIFE programs;  2) She must have provided you care or support while living with you those two years so you could remain at home; and 3) She must have no other permanent residence.  Anyone, not just family members, can get a “hardship waiver” from the estate recovery rules if they meet these conditions.      

Can my son be reimbursed for the money he spent to maintain my house while I was in the nursing home or receiving care at home?  Yes, if the house is sold after your death to pay the Medical Assistance debt.  Anyone who is taking care of your house by paying taxes, utility bills, repair costs, and other maintenance expenses while you’re in a nursing home or receiving care at home should be reimbursed from the proceeds of the sale of the house before DPW gets repaid.  Keep records of the payments to show DPW.   

There may be other important and compelling reasons that Medical Assistance Estate Recovery would cause serious problems for someone who needs to live in your house after your death.  Talk to a lawyer for more information about hardship waivers.

How do you ask for a hardship waiver?  Write a letter explaining the situation and the compelling reasons that the Department of Public Welfare should not use the house to pay the Medical Assistance debt.  Give as many details as possible about how estate recovery would cause problems and would not be fair for the person living in the house.  Make a copy of the letter for yourself and mail the original letter certified, return receipt requested, to: Estate Recovery Program, Post Office Box 8486, Harrisburg, PA 17105-8486.

Legal Assistance in Philadelphia

If you are 60 years old or older, you may qualify for free legal assistance from our office.  Call or visit The Elderly Law Project, Community Legal Services, Inc., 3638 North Broad Street, Philadelphia, Pa. 19140, (215) 227-2400 or SeniorLAW Center at 215-988-1244, Mondays through Fridays, 9 a.m. – 1 p.m.

Beth Shapiro is an Attorney with the Elderly Law Project, Community Legal Services, Inc.