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Alexandria, VA Estate Planning Blog

Thursday, February 9, 2012

Medicaid Home Treatment; $5,000 contingent property rule & exceptions

What if you own property contiguous to the property that your home sits on (the lot for Medicaid purposes)?

The general rule is that you can exclude $5,000 worth of property contiguous to the lot for which your home sits on. However, if the contiguous property is essential to the operation of the home, then it may be excluded from the Medicaid analysis also.

The Virginia Medicaid Manual provides the following:

 

The home exclusion applies to land adjoining the home plot if not completely separated from it by land in which neither the individual nor his or her spouse has an ownership interest. Five thousand ($5,000) of assessed value of land contiguous to the home lot can be included in the home exclusion.

For the purposes of the home exclusion, easements and public rights of way (utility lines, roads, etc.) do not separate other land from the home plot.

Contiguous Property Essential to the Operation of the Home

The equity value of countable contiguous property may cause resources to

Exceed the maximum limit. In these cases, reevaluate the home property

Applying the definition of the home used in the State Plan for Medical

Assistance in Virginia in effect on January 1, 1972. At that time a home

means the house and lot used as the principal residence and all contiguous

property essential to the operation of the home regardless of value.

Property essential to the operation of the home means:

 

a. land used for regular production of any food/goods for the household's

consumption only, including:

• vegetable gardens;

• pastureland for livestock raised for milk or meat;

• land to raise chickens, pigs, etc;

• outbuildings used to process and/or store any of the above.

The amount of land necessary to support animals named above is

established by the local extension service. However, only actual land

being used to support the animals will be allowed.

b. driveways connecting the home site to public roadways.

c. land necessary to the home site to meet local zoning requirements (e.g.

building site, mobile home sites, road frontage, distance from road,

etc.).

d. land necessary for compliance with state local health requirements (e.g.,

distance between home and septic tank(s));

e. water supply for the household.

f. existing burial plots.

g. outbuildings used in connection with dwelling, such as garages or tool

sheds

 

CAUTION: PLEASE NOTE THAT YOUR HOME MUST BE A PRINCIPAL PLACE OF RESIDENCE FOR IT TO BE EXCLUDED.

 

(FOR MORE ON THE HOME/ PRINCIPAL PLACE OF RESIDENCE EXCLUSION CLICK HERE)

(FOR MORE ON THE MOBILE HOME RULE CLICK HERE

 

If you have any questions, please give us a call. We welcome questions and want to talk with you or your advisor.


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