As we reflect on the close of World Elder Abuse Awareness Month, we wanted to share some information on this important issue. The Centers for Disease Control and Prevention defines elder abuse as an intentional act, or failure to act, by a caregiver or another person in a relationship involving an expectation of trust that causes or creates a risk of harm to an older adult. This may be in the form of neglect, physical, sexual, emotional, psychological, or financial abuse. Unfortunately, elder abuse has been on the rise during the COVID-19 pandemic. As Ruder Ware elder law attorneys, we wanted to bring attention to a 2015 case of severe elder abuse with the goal of dispelling the Medicaid myth that contributed to the abuse.

A California daughter and granddaughter’s fears of losing their home to Medicaid may have contributed to a severe case of elder abuse. In 2018, Amanda Havens was sentenced to 17 years in prison for elder abuse after her 90-year-old grandmother, Dorothy Havens, was found neglected, with bedsores and open wounds, in the home they shared. Dorothy died due to sepsis the day after being discovered by authorities. Amanda’s mother, Kathryn Havens, who also lived with Dorothy, plead no contest to second-degree murder and was sentenced to 15 years to life in prison. According to an article in the Record Searchlight, a local publication, Amanda and Kathryn knew Dorothy needed full-time care and disregarded the doctor’s orders recommending full-time professional home health care. They did not apply for Medicaid on her behalf due to a fear that Medicaid would “take the house.”

It is a common misconception that the state will immediately take a Medicaid recipient’s home when they enter an assisted living facility or nursing home (i.e. a long-term care facility). Long-term care residents do not automatically have to sell their homes in order to qualify for Medicaid. In Wisconsin, the home will not be considered a countable asset for Medicaid eligibility purposes as long as the long-term care resident intends to return home. However, the state may place a lien on the home, which means that if the home is sold, the Medicaid recipient would have to pay back the state for the amount of the lien.

After a Medicaid recipient dies, the state may attempt to recover Medicaid payments from the recipient’s estate, which means the house would likely need to be sold. However, there are things Medicaid recipients and their families can proactively do to protect the home.

In Wisconsin, one way to protect the home of a Medicaid applicant, and still be eligible for Medicaid, is to transfer the house to the following individuals:

• The applicant’s spouse;
• A child who is under age 21 or who is blind or disabled;
• Into a trust for the sole benefit of a disabled individual under age 65 (even if the trust is for the benefit of the Medicaid applicant, under certain circumstances);
• A sibling who has lived in the home during the year preceding the applicant’s institutionalization and who already holds an equity interest in the home;
• A “caretaker child,” who is defined as a child of the applicant who lived in the house for at least two years prior to the applicant’s institutionalization and who during that period provided care that allowed the applicant to avoid a nursing home stay.

A second way to protect the home of a Medicaid applicant is through a little advanced planning. This may include use of certain trusts to protect the house from estate recovery.

The moral is: don’t let a fear of Medicaid prevent you from getting your loved one the care they need. While the thought of losing a home is scary, there are things you can do to protect the house.