–by Jeffery D. Stinson of Stinson Law Firm, LLC, CELA*
Probably one of the most common misconceptions with the Medicaid program is that by becoming Medicaid
eligible, the State of Indiana or some agency thereof will “take” the recipient’s home. The fact of the matter is that
very rarely is a home or any type of real estate a barrier to Medicaid eligibility.
Exempt Real Estate
Typically, real estate does not count toward the recipient’s maximum resource limit (asset limit). The following
types of real estate are exempt under the Medicaid program:
The home if it is the principal residence of the recipient or the recipient’s spouse, minor child, adult disabled
or blind child, or parent if recipient is a minor.
- Income producing real estate where the income is greater than the expenses of ownership. Income producing
real estate must also receive fair market rent in order to avoid a transfer of assets penalty (see transfer section
- Real estate used to produce food for home consumption.
- Burial plots.
- Real estate owned in the sole name of the non-recipient spouse.
- Real estate owned jointly with rights of survivorship where the joint owner is not willing to sell the property.
- Real estate offered for sale or for rent.
Exempt Real Estate Transfers
The home can sometimes be transferred out of the Medicaid recipient’s name to other individuals as well. In
general, Medicaid law discourages individuals from certain transfers of assets to meet the maximum resource
limit. A person who gives away an asset (or sells it for less than it is worth) may be determined to be ineligible for
Medicaid coverage for nursing home or equivalent Home & Community Based Services for a period of time. This
period of ineligibility is known as the transfer “penalty period.” In some circumstances, however, real estate can
be transferred out of the recipient’s name free of a transfer of assets penalty.
The following transfers of real estate are exempt from the transfer of assets penalty under the Medicaid program:
- The transfer to a spouse.
- The transfer of the home to a child under the age of 21 years or a child who is blind or disabled.
- The transfer of the home to a sibling who also has an equity interest in the property and who has lived in the
property more than one year.
- The transfer of a home to a child who has lived in the home for at least two years and provided care that kept
the recipient out of institutionalized care during this time period.
- The transfer of any real estate to a person under the age of 65 with a disability or to a Special Needs Trust for