Sibling with an Equity Interest

• May 2, 2024 at 2:05 pm #33827
  Tyler Barrett

  All,

  My client owns a 1/3 interest in real estate with her brother and sister-in-law. Prior to entering the nursing home, my client lived in a house on the property. The brother and sister-in-law still live on the property (there are two houses right next to each other). Where this gets interesting is that we had an appraisal done, and the property is worth $5 million. In terms of liquid assets, the client has only about $138K. She used to have more, but we have been paying the nursing home privately for the past few months while we sorted out everything (we had to surrender life insurance policies and sell securities). My client’s income is only $2,087/mo.

  My gut reaction since the beginning of this case has been to rely on the sibling w/ an equity interest exemption and transfer my client’s 1/3 share to her brother (who is the sole beneficiary under her will, as my client was never married and has no children or other close family members living). Of course, when OKDHS finds out the value, I am sure they are going to freak out. However, my understanding has always been that there is no dollar figure limitation on the sibling w/ an equity interest exemption.

  Do you have any thoughts? Would you handle this differently? Thanks in advance for your time.

  Sincerely,

  Tyler Barrett

  May 3, 2024 at 7:31 am #33828
  Collin Terry

  Tyler,

  As I read the case facts and apply them to the exemption found in 317:35-19-20(5)(H)(III), my concern would be that the sibling did not reside in the same home, but rather on the same property.

  (III) a sibling who has equity interest in the home and resided in the home for at least one year immediately prior to the institutionalization of the individual;

  However, if we turn to 317:35-5-41.1(a)(1), I think there is room for argument that the entire property (including other buildings on the land) is included as part of the home.

  (1) Home property includes all property which is adjacent to the home. Land is considered adjacent even if separated by a boundary line, street, alley, highway, or waterway.

  OKDHS is typically good about providing their stance on a matter ahead of filing the Medicaid application. I would reach out to them to confirm they would apply the above exemption to your client’s case facts. I would agree the value of the home should not influence the analysis as there is no limit defined.

  May 8, 2024 at 3:07 pm #33846
  Tyler Barrett

  Thanks, Collin. I appreciate your input.