Can I transfer my interest in a house my parents own in a Life Estate –
without affecting their Medicaid?
My parents have a life estate in a home that they gifted to me six years ago. I want to transfer the home to my brother. My parents own a dog that has been deemed dangerous, and I don’t want the liability of owning the home. If we transfer the house, will the Medicaid look-back include this change?
There are two issues here. First, the basic question is whether you have any liability if the dog were to bite and harm someone. The answer is no. It’s their problem.
It isn’t clear how you would be liable for anything your parents did in the house. As the life estate owners, they have full rights of use and possession of the property during their lives and are fully responsible for its maintenance and any of their acts that cause damage to others or acts of the dog.
As a remainder owner of the “remainder interest,” your only right is to become the full owner when your parents have died. As the “remainder person” you don’t even technically have the right to enter the property without their permission and can’t be held responsible for what happens there.
The second question is whether, if you did give away your remainder interest to your brother, it would affect your parent’s Medicaid eligibility. It would not.
You can freely transfer your interest in your parents’ house to your brother without it affecting your parents’ potential eligibility for Medicaid. The five-year look-back period only applies to transfers by your parents, not by you. It’s important to note that in New York until recently, the five-year look-back period only impacted Medicaid eligibility for nursing home care, not home care benefits. That rule changed as of October 1, 2020, when New York adopted a 2 ½ year look back period for home care benefits, a rule that will adversely affect many middle-income seniors in New York. Implementation of the new law is quite unclear at this time, so experienced counsel should be consulted for all persons who are considering applying for Medicaid of any kind.
Transferring your interest in the house is no different from giving away anything else you own, whether it’s your house, the remainder interest in the home of your parents, or funds, or investments you may own. The issue is about your planning, not the planning for your parents. For individualized guidance, schedule a free consultation with Pierro, Connor & Strauss, by emailing firstname.lastname@example.org.