Releasing your home equity – Summary
The residence is not counted as an asset by Medicaid or the veteran pension benefit while owned by the applicant as a residence. And time is limited under both sets of eligibility rules for non-occupancy ownership.
It greatly helps to know early where the ownership of the residence will eventually go. The dollar value of the current equity is also essential to know early.
Then, give some serious thought to how and when you want that equity released. There can be found ways to use the equity and still direct the distribution of ownership, and your best guide will be your Medicaid eligibility planning attorney.
When these two points are clarified, then selection of the most promising strategies can begin. As with all such planning, sudden changes in circumstance can necessitate sudden shifts in strategy, but thinking it through as solidly as possible as early as possible will greatly enhance your chances for a good outcome.
As you think about it, you’ll see that continued occupancy can be very valuable, so its likelihood and duration should be carefully evaluated in your particular case. If the residence is to be sold and the proceeds used for long-term care costs, this development should be well-timed, along with the use of those funds.
If occupancy is to continue while the released equity cash is used for aging-in-place at home, you’ll want to consider thoughtfully how best to position and use that released equity value.
It is not safe to ignore the potential need for Medicaid eligibility going forward. If you have planned for it and it is never needed, no harm will be done. If, however, you planned not to need Medicaid, and the need does materialize, much damage can be done financially, and to the overall care situation which will now be severely limited in available family resources.
Our own white paper, “Home Equity Release Strategies – Advantages, Drawbacks, and Other Aspects of Each,” is available here to aid your exploration of this emerging array of home equity release strategies. It is already immense, and is still growing. As you seek out each approach that interests you, remember that you’ll be dealing directly, in most instances, with the vendor.
You do not want to be the “ignorant buyer.”