Will I Qualify for Benefits If I Own A Life Estate?

The rules for both Virginia Medicaid and Veterans benefits can be confusing, especially if you or your loved one owns a life estate.  If you have a life estate, this means that you have the right to live in the home during your lifetime and the heirs will automatically inherit the property when you pass away.
Both Medicaid and the VA will not count your home as an asset under certain circumstances.  For VA purposes, your primary residence is generally exempt and will not count in your asset total.  For a married couple, where one spouse still lives in the home, Medicaid will not count the home as an asset.  For a single person entering a nursing home, the residence is not counted for the first six months. But be aware that Medicaid does have a home equity cap of $506,000.
Unfortunately, the process becomes slightly more complicated when a life estate is involved.  The good news is that currently, if you or your loved one has a life estate interest in property, it will not be counted as a resource for Virginia Medicaid purposes.  But be aware that this rule may change in the future.
If you are applying for VA Aid and Attendance, the life estate will be a countable resource. This means that each life interest you have must be declared on your VA application and may allow the VA to determine that you have too many assets to qualify for the Aid and Attendance pension.  Additionally, because it is a life estate and not total ownership, the exact monetary value of the property can be difficult to determine.  For this reason, it is important that you work with an experienced attorney or other professional who is licensed to practice before the VA when applying for VA benefits or Medicaid.