1. Should I Transfer my House to my Kids?
Presented by
Timothy L. Takacs
Certified Elder Law Attorney
Intro –
Audience profile – attorney, bankers, financial advisors, real estate professionals, insurance professionals, farmers/land owners……
How do we save the home – TennCare recoupment of Medicaid debt at time of death from the estate of the Medicaid recipient – usually house is only asset left due to financial rules. House is exempt

2. Homestead Exemption 552K for single person No limit for married couple
Includes all contiguous land

3. A deferred Countable Asset
Estate Recovery – legal basis Federal statute 42 USC § 1396p State statute TCA §
No lien – No lien unless court judgment for recovery of benefits incorrectly paid. What we are really talking about is estate recovery. Apply to 55+ LTC, HCBS, hospital and RX
The State of Tennessee is required under federal law to seek estate recovery as a condition to receive federal funds. We understand that Medicaid or TennCare is a mix of state and federal money.
Each state is allowed to define estate – limited or expanded – in TN the definition of estate is limited to probate estate. Case law evolution

4. Protecting the home
Estate Recovery limited to Probate Estate only for those that die on Medicaid.
Probate avoidance options:
Transfer to spouse
Transfer to disabled or blind child
Transfer to a trust
Sell prior to death
No lien.
limited to probate estate only – so if the Medicaid recipient does not own any assets at the time of his/her death – other words there is nothing in his/her name
TCA c2 not receiving TennCare benefits at time of death.
Probate avoidance options: courts are chipping away at definition of probate estate – Trigg – real property vesting in heirs immediately at death does not avoid TennCare recoupment claim. Gregory-14 months after death opened probate, TennCAre filed claim – notice requirement to TennCare overrides probate SOL. Actual notice – ie TennCare Release. Seems to reverse Tanner 2009 case ie 1 yr SOL. Really just adds condition by defining notice - Stidham (RLT)
Transfer to spouse. Transfer to blind or disabled child (any age) out right or
Transfer to trust fbo disabled person under age of 65, or disabled child but not a
Revocable trust – no protection. And not an
Irrevocable trust for own benefit or benefit of child not disabled - offers protection but initiates 5 yr clock - planning ahead-
Sell it – generates funds for spend down – home ownership can be burdensome

5. Planning ahead 5 year rule Gift to children Pros and Cons
Transfer to a Trust
Life estate
Proper planning in advance of illness – some crystal ball gazing required
5 year rule – Medicaid “looks back” prior 5 years from time of application to see what happened to assets. Transfer between spouses is permissible
Giving to children – generally bad idea; creditors, divorces, unanticipated illnesses, bankruptcy etc Also have to consider tax basis consequences
You can retain a life estate – that helps secure your interest and for now still escapes estate recovery -
Use of trusts – irrevocable trust – major advantage is creditor protection and major disadvantage is inflexibility and loss of control.

6. Joint ownership with sibling Reverse mortgage
Unique situations
Caregiver child rule
Minor child
Hardship
Joint ownership with sibling
Reverse mortgage
Caregiver child rule – 2 yrs lived with elder and prevents elder from going into a nursing facility. Proof of residence and statement from PCP re caregiving. If using caregiver child situation can transfer prior to death.
Minor child – survived by a minor child <18. this exception has to be in place at time of death not application.
Hardship – not well defined, could be viewed as temporary and duty to report changes. This exception has to be in place at time of death not application.
Sibling – might fall under hardship – depends on equity interest
Reverse mortgage – if a reverse mortgage has depleted equity in home – little or nothing for TennCare to recover from
DHS did not inform of estate recovery
If you did not transfer property prior to death but are survived by spouse or disabled child – no recovery during their life time.