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Senior citizen choices when selling a home. What to do if already on Medicaid?? What safe choices are there to keep her money?

Wood Dale, IL |

Should she gift her money to family members?? Or, should she just put the money in a trust?? Will Medicaid want any money replaced from previous medical bills and hospital stays??

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Attorney answers 5


This is not a question that can be answered easily online. You should consult with an elder law attorney before taking any action. It is wish to gift any money unless you know the effect that it would have on the individuals future Medicaid eligibility. There is currently a 60 month "look back" period that could cause problems in the future.

I suggest that you look online at for an elder law attorney in your area.

Best wishes!

Legal Disclaimer: Paul A. Smolinski is licensed to practice law in the State of Illinois only, and as such, his answers to AVVO inquiries are based on his understanding of Illinois law only. His answers are for general information about perceived legal issues within this question only and no response to any posted inquiry should be deemed to extend any right of confidentiality between you and Mr. Smolinski, to constitute legal advice, or create an attorney/client or other contractual relationship. An attorney/client relationship is formed only by specific agreement including an evaluation of the specific legal problem and review of all the facts and documents at issue. We try to insure the accuracy of this information, but we cannot guarantee its accuracy. The reader should never assume that this information applies to his or her specific situation or constitutes legal advice. Therefore, please consult competent counsel that practices in the subject area in your jurisdiction and who is familiar with your specific facts and all of the circumstances.


As Attorney Smolinsky stated, this would a question for an elder law attorney in Illinois. However, in Massachusetts, a primary residence may be transferred to certain people and incur no penalty. The most common are: a spouse, a caretaker child, a sibling who also owns the house.

If the person is already on Medicaid, the state may already be entitled to recovery from the sale proceeds when the house is sold - and the remaining proceeds may make them ineligible for continuing Medicaid benefits.

There are a lot of "what ifs" in your question, and those variables change the answers. I think you would be well served by consulting with an attorney who would be able to give you specific answers based on your specific facts.

Good luck with this.


I want to reiterate the answers provided by the previous attorneys. Transferring the house to a relative or giving the proceeds of the sale of the house to a relative or trust will cause the elder to lose her benefits under most circumstances. The Elder Law attorney should be able to tell you whether there are any exceptions that apply.

And yes, if the elder is in a nursing home, then Medicaid will want reimbursement for the money spent on the nursing home. Depending on the cost of care, the repayment may not be as bad as you think, and it may be negotiable.

I wish you the best of luck.

This is not intended as legal advice and should only be used for informational purposes only. You should never believe any information that you receive on the internet, especially information that is probably being provided in the late evening hours when I should be sleeping.


As an Illinois Elder Attorney I strongly advise you to retain an Elder Law Attorney prior ro doing anything in regard to this matter. Making the wrong move could easily result in loss of Medicaid for the Senior Citizen.

That being said there are several important questions that will impact the decision. Is the senior still in the community or is the senior in a long term care facility? Who lived with the senior in the residence and for how long? Was the person a caretaker? Does the senior have any disabled children?

Assuming she is already in a facility, she was living alone in the home and has no disabled children, transferring the cash to anyone without receiving fair market value in return will result in a penalty period where she will no longer be eligible for Medicaid. If the net proceeds are large, say $600,000.00 or greater, then there are several things that might be done if getting money to the children is really the Senior's desire.

My preferred method for handling this is to set up a an OBRA D4C self settled pooled payback trust. These are wonderful and offer numerous benfits especially for the Senior. The Senior gets to use the money in the trust for her benefit for the rest of her life to pay for those things not covered by Medicaid or Medicare, including hair salon, massage therapy, new furniture especially mattresses, and many more things. Medicaid has a lien on the Trust but does not collect until the senior's death. Since the senior remains on Medicaid, the money lasts much longer because the lien accrues at the Medicaid rate minus the seniors monthly contribution, as opposed to the private pay rate. This means it is also more likely that there may be money left for the seniors heirs after the seniors death.

It is important that this be done quickly. You do not want the proceeds to remain in the senior's account for very long. Preferrably they should be deposited and withdrawn within days.

If the previous medical and hospital bills are not going to be picked up by Medicaid, which is a possibility, then they can be paid out of the pooled trust after it is set up.

Again, this is not something to try without an experience Elder Law Attorney. The fees can be paid out of the pooled trust and the efficiency of setting it up can easily save more money than the amount of the legal fees.

Disclaimer. The information contained in this answer is provided for informational purposes only, and should not be construed as specific legal advice, further is not intended and it does not constitute or create an attorney-client relationship between The Law Office of James C. Siebert & Associates and any recipients. No recipient of this answer should act or refrain from acting on the basis of this answer without seeking the appropriate legal advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. Under Illinois ethical rules answers to questions might be considered as advertisement and therefore please consider the answer to the question is ADVERTISING MATERIAL.


Everybody's right about getting an elder law attorney to help guide you through this, but let's see if I can answer your questions:
1.Should she gift her money to family members??
A: No. NO!
2. Or, should she just put the money in a trust??
A: Nosiree!
3. Will Medicaid want any money replaced from previous medical bills and hospital stays??
A. No, they'll just disqualify her until the money's gone.
Depending on the amount of $$$, different options are available, if someone tells you otherwise, says "Thanks!" and leave. Then find someone who knows what they're talking about.

James Cummings Siebert

James Cummings Siebert


Just to clarify putting the money into a revovable trust or an non-OBRA irrevocable trust should not be done. However, in Illinois the best solution most likely would be to put the money into an OBRA pooled trust. In my opinion you definitely need an Elder Law attorney to assist you with establishing the Trust and interacting with Medicaid in regard to the sale and subsequent funding of the Trust.

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