If I Sell The House, Do The Proceeds Have to Go Toward Memory Care?

SCENARIO: My sibling never married and has no children & no will. My sibling is in memory care, and I have been paying the monthly bills from my sibling’s account because there was too much money to qualify for any assistance. I am in the process of selling my sibling’s house but am concerned about how to best handle the transaction without hurting my sibling’s ability to qualify for medicaid.

QUESTION: Is there any “gifting” allowed, or do all of the proceeds have to go into his account for memory care?

Gifting would no longer be an option. However, If you are interested in Medicaid Planning for your sibling, any gift could be penalized by a period of ineligibility for Medicaid benefits. However, transfers of assets may be made to a trust for the sole benefit of your sibling. This would allow you to use the proceeds of the house to cover the costs of the long-term care of your sibling while helping your sibling to remain eligible for medicaid.