Burgess and Sweeney Law



The Michigan Medicaid statute provides that the homestead and all adjoining land is a non-
countable asset if the value is currently below $713,000.00. However, a client may wish to sell
this property or convey it to their children. These options and their consequences need to be
discussed with an attorney as to the effect on long term care.

If the Medicaid applicant continues to own the homestead in their name alone, the asset is non-
countable. However, for it to remain non-counted, the homestead cannot be sold while they are
a resident of a nursing home. As a result, someone will be required to maintain the home
during this period and pay related expenses. The Medicaid statute does provide that someone
can reside in the home and maintain it.

If the Medicaid applicant chooses to add a child’s name to the property to avoid probate, they
need to consider the possible consequences. This could be a divestment resulting in a penalty
period, and may also result in the home being treated as a countable asset. While there are
some circumstances where this conveyance would be allowed, this should be discussed with an
elder law attorney.

Another possible conveyance includes a retention of a life estate or life lease in the property.
While this allows the applicant to continue to reside in their home and avoids the need for
probate, it will also result in an additional counted asset. There are tables for calculating the
cash value of both a life estate and life lease. In addition, if the conveyance was for less than
fair market value it will be considered a divestment resulting in a penalty period. It is important
that all of these issues regarding the homestead of the Medicaid applicant be discussed with the

Burgess and Sweeney Law, P.C. continue to advise clients on estate planning, elder law,
Medicaid planning, probate and trust administration, guardianships and conservatorships,
business law, and real estate. As a result of the constantly changing laws in these areas, the
information provided may change. We would be pleased to discuss this, or any other issues, in
more detail.

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