Property in Revocable Trust May Be Excluded From Available Resources if Medicaid Applicant Signs Agreement to Sell

Nebraska's highest court holds that a Medicaid applicant may be able to exclude real property from his or her available resources by signing an agreement to sell the property within six months even if the property is held in a revocable trust. Winslow v. State (Neb., No. S-18-181, May 3, 2019).

LaVeta Winslow put her house into a revocable trust and named herself and her daughter as trustees. The trust document gave Ms. Winslow the power to sell the property. Ms. Winslow later entered a nursing home and applied for Medicaid. The state found that the property was an available resource and denied her application. Ms. Winslow transferred the property into her name. Once the property was in her name, the state allowed her to sign an agreement to sell the property, which gave her six months to sell the property and excluded the property as an available resource during that time. She applied for Medicaid again and the state approved her application.

Ms. Winslow appealed, arguing that the state should not have counted the property as an available resource and that she should have been able to sign the agreement to sell while the property was still in the revocable trust. The trial court found that Ms. Winslow's house did not qualify as her home because she had not lived in it for six months and that Ms. Winslow did not have the legal authority to liquidate the house until it was transferred into her name. Ms. Winslow appealed.

The Nebraska Supreme Court affirms although the court holds that a Medicaid applicant can sign the agreement to sell while property is still in a trust. According to the court, "real property held by a revocable trust which is determined to be an available resource may be eligible for the [six]-month exception if the applicant has authority to liquidate the property." Even though Ms. Winslow had the authority to liquidate the property, the court rules that the state did not need to provide her with the agreement to sell because there was no evidence her available resources excluding the house were below the resource limit.

For the full text of this decision, click here.

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