YOUR PRIMARY RESIDENCE AND MEDICAID PLANNING

The Facts: I want both of my children to receive the proceeds from the sale of my house upon my death. My son has been my live-in caregiver for four years.

The Question: Can I transfer my house to my son as part of my Medicaid planning but still provide for equal distribution of the proceeds of the sale of my house to my son and daughter after my death?

The Answer: Yes, you can. The transfer of your house to your caregiver son is an exempt transfer under the Medicaid rules and will not trigger any adverse Medicaid-related consequences. However, since the house will be your son's, a written family agreement will be needed to ensure that your daughter receives a share of the proceeds from the sale upon your death.

A deed should be prepared transferring your house to your son. At the same time, a family agreement should be prepared in which your son acknowledges that the transfer of the house into his name was done for Medicaid eligibility purposes only and agrees that the proceeds of the sale of the house will be divided with your daughter. At a minimum, the agreement should address who can live in the house, how the sale proceeds should be divided and who will pay for repairs, insurance and taxes on the house. The agreement should also provide that your son cannot borrow against the house without your daughter's prior written consent. You, your son and your daughter should sign the agreement in the presence of a notary at the same time that you sign the deed transferring the house to your son.

By making the exempt transfer of your house to your caregiver son, you can protect the entire value of your house. By also entering into a family agreement, you can pass a portion of your estate to your daughter.