Nursing Home Asset Lookback

I have a deal on a property that is owned by an older lady whom is in an assisting living home. She has a home which is paid for that her grandsons live in now. She wants to sell me the home and she is going to give each of the grandsons some of the money. Sound good so far right. But then my closing agent tells me that in Tennessee if this lady dies within 5 years of selling the property and owes medical bills, nursing home fees, etc. That they can come after the property. Does anyone have know anything about this? I would ask my attorney but she is on medical leave for the next few weeks and I can’t wait that long.



Medicaid does have a 5 year lookback provision intended to prevent abuse by people transferring assets before going on the gov’t dole. However, the sale is not illegal and cannot be reversed; I believe the only “penalty” would be a period of ineligibility for the seller. However, since she’s already in a facility, I would assume that she’s either paying her way or on some kind of LTC insurance.

Medicaid also has an estate recovery provision, whereby amounts paid by medicaid can be recovered from a decedent’s estate. Usually, this is limited to estates that pass through probate, but all estates are “eligible”. A house that is still in her estate when she dies can be sold, but any transactions that take place (including transfers to heirs) prior to death cannot be reversed. It’s simply a recovery from whatever estate exists at the time of death.

So, to strictly answer your question, there’s no reason why you can’t buy and the consequences of the decision are hers to bear. You should not be affected.

Personally, i’d have a hard time sleeping if I knew that I bought this lady’s house without at least advising her that there may be medicaid consequences and that she should seek advice from someone who specializes in this issue.

DISCLAIMER: I am not a specialist in these matters and this post is intended for general information only.

Mark Wagner, CPA

Hey good question,

Thanks for the insite, although always seek legal advice. Im dealing with a friend in this same type of sitution his mothers medical bills are rising, and she hoped that the property could pass to the youngest son, yet if some estate planning isnt done soon the home is sure to sit in probate to pay medical bills, and be dived to the other heirs. The tenitive plan is to bring(vest) the younest son onto the deed of the property, thus it automatically transfers to him after she passes and the other heirs wont have a leg to stand on, but I dont know about the medical bills, do you think they will still attach???

you need an atty.

If this lady receives the proceeds of the sale in an arms length transfer, then there are no problems for you and your ownership is secure. Noone will come back five years after your purchase to attach a medical lien. The settlement attorney was just being an alarmist.