There’s an old saying that the difference between salad and trash is timing. A recent meeting I had with my client Bill demonstrated how accurate that old saying is, especially from a Medicaid planning standpoint!
Bill came to see me because his wife’s dementia had progressed to the point where he could no longer provide the level of care she required at home; he was preparing to place her in a memory-care community. In our conversation, Bill mentioned that he wanted to get everything in order. As part of that organizational process, he wanted to sell the house. Bill and his wife had lived in their home for more than a decade, but he thought it would be best to sell since he assumed he would need the funds to care for his wife. Bill said he knew he could sell the home quickly – for years his neighbor had told him to call before he listed the home because he would buy it.
I told Bill that it may seem like it makes sense to sell their home quickly, but I suggested he slow down a bit and think this through. Bill needed to analyze how he intended to pay for his wife’s care in the memory-care community. If Medicaid assistance was a possibility, then the timing of the home sale is crucial.
In Bill’s situation, the house would be treated as a “non-countable” or “excluded” resource in a Medicaid application – meaning Bill as the “Community Spouse” could continue to live in their home and not have it be considered as an asset for his wife’s Medicaid application. If Bill sold the home prematurely, the proceeds of the home sale would become part of their countable assets and may need to be spent on his wife’s care before his wife would qualify for Medicaid long-term care assistance. Further, if we took the steps to get the home titled in his name only, then there is a possibility that he could sell the home later, after his wife was accepted on Medicaid, and retain the home proceeds.
The difference between selling the home too early verses waiting until the timing is right could result in a hundred thousand dollar savings to Bill. To me, a hundred thousand dollar savings from the timing of the home sale truly is the difference between salad and trash. Just remember, the rules surrounding Medicaid are complex and continuously changing. However, when it comes to Medicaid assistance, there are planning opportunities available if you know where to find them.