In Arkansas, with proper planning, you can protect your house from the nursing home and Medicaid recovery. The really exciting part is that this works for other real estate too.
Hi. I’m Gary the owner of DeWitt law. If you need help with Medicaid planning or filling out the application, go to DeWitt dot law or call us.
In Arkansas, Medicaid can only recover against what is in your final probate estate. So, by keeping your home out of Probate, your keep it away from Medicaid.
First, if you are a married couple, and one needs Medicaid, then protecting the home is fairly simple. We’ll transfer the home to the person staying home. That way the person in the nursing home doesn’t own real estate.
If you are single, then you’ll be sure to mark the box on your Medicaid application that says you intend to return home.
It’s after the last peron passes that the real protection starts.
You can keep Medicaid from making a claim or placing a lien against the house. You do this by making sure your house and other real estate passes outside of Probate.
Before August of 2021, the only really safe way to do this was to put the real estate in an irrevocable trust and hope you didn’t need Medicaid for 5 years. The other issue with this is you must give up control and ownership of the real estate to the trustee.
The law stated that real estate passing through a beneficiary deed was subject to Medicaid revovery.
As of August of 2021, the law changes to make houses passing through beneficiary deeds exempt from Medicaid recovery. This means that Medicaid cannot come back and claim against the real estate passing through a beneficiary deed.
The proper and best way to do this is with a “beneficiary deed.” This is a type of deed allowed in Arkansas that says when I die, the house goes to who I want it to without Probate. If you want to put further rules in place, like sell the house or hold it for a child, you can have the beneficiary deed leave the real estate to a trust.
You can have the best of both worlds. You can have a revocable trust that is just there waiting for the real estate. Then the beneficiary deed says that when you pass the real estate goes to the trust. You can also setup your accounts to pour into the trust and let the trust distribute everything without Probate.
I know a lot of people watching this will just say “I’ll just put my kids on the deed.” This can lead to more problems than it is worth. First, your house becomes our house. Their creditors become your creditors. Their bills become your bills. Their lawsuits become your lawsuits. And, their tax troubles become your tax troubles. Not to mention that if you want to sell later, or change your mind, you need their signature too.
We take care of you every step of the way so you can care for your family. Start now at DeWitt dot law or give us a call.