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By Ryan V. McNeill, Attorney at Law

There have been some recent changes in how Medicaid caseworkers have been told to treat jointly held property in the context of an application (or redetermination) for eligibility for Medicaid to assist with the cost of skilled nursing care expenses.  There are several different ways that property can be held jointly in North Carolina:

  • Tenants in common – Tenants in common each own their respective shares as a percentage of the whole with no tenant owning any particular portion of the property. Unless otherwise noted in the deed if any tenant in common passes away, his/her share of the property is distributed in accordance with his/her will.  Any tenant in common may sell or otherwise dispose of his/her interest at any time.  Under North Carolina law a tenancy in common may have right of survivorship if it is designated in the deed and if so it’s treated identically to joint tenancy with right of survivorship.
  • Joint Tenants – Like tenants in common each joint tenant owns a portion of undivided ownership in the property. Typically, unless it’s otherwise stated joint tenancies also have “right of survivorship” which means that if any owner dies, the other owners receive that owner’s share and it does not pass through the probate process.  Any joint tenant may sell his/her interest and may also sever the right of survivorship and convert at least their portion to tenancy in common at any time.

The North Carolina Medicaid manual provides that property held as “tenants in common” should not be counted as a resource if that property is held with an individual outside of the marital unit.  Given the similarity in tenants in common and joint tenancy in North Carolina, historically that has meant that any form of joint ownership of property, whether tenants in common, joint tenants with right of survivorship or tenants in common with right of survivorship, would be treated the same and that the ownership interest by a Medicaid applicant or recipient would not count toward eligibility.

Despite no official changes being made in the federal laws, North Carolina Medicaid Manual, or even published guidance, there have been changes in how caseworkers have been instructed to treat jointly held property.  In essence, Department of Social Services (DSS) caseworkers have been instructed to follow the literal language of the Medicaid manual and to only exempt property that is held as “tenants in common” rather than as “joint tenants with right of survivorship.”  This is on a county-by-county basis, so it has not affected the interpretations of all counties yet, although it appears that more and more counties are receiving the same guidance from the North Carolina Department of Health and Human Services.  They may also treat any situation where “survivorship” rights are on the deed as a gift transfer that could create a penalty if done within the five (5) year lookback period.

What does this mean for you?

At present we are not advising our clients to make any immediate changes to deeds that have been previously done, whether as joint tenants, tenancy in common, or tenancy in common with right of survivorship.  If you are applying for Medicaid assistance where one of these deeds was used to protect property or make it noncountable for Medicaid purposes, then we’d recommend that you speak with the attorney at Brinkley Walser Stoner, PLLC who assisted you – or with an attorney familiar with DSS treatment of such property ownership in North Carolina – to inquire about what steps can be taken to alleviate the problem this new interpretation is causing.  We do not think that there is an immediate cause for concern, however some previous conveyances may need to be changed in order to ensure that active applications or redetermination are approved without issue.