To learn more about Employment Law, click here.

The ADEA protects people 40 years of age or older from discrimination in the workplace or when applying for jobs.  The ADEA further protects workers from retaliation for openly opposing discriminatory practices based on age or from cooperating with or participating in litigation under the ADEA.  The ADEA covers employers with 20 or more employees, including state and local governments. To learn more about your rights under this federal statute, check out the EEOC’s ADEA page.

When a landlord is seeking to terminate a residential tenancy, it is important to select the proper statutory grounds under which to proceed. Under no circumstances may a tenant be legally “evicted” without meeting a statutory prerequisite. Note that the statute may require that one or more notices be served upon the tenant prior to proceeding with court action. With the exception of a tenant’s non-payment of rent, or failure to pay rent after a reasonable increase (which requires a separate notice unto itself), a landlord is required to serve notice upon a tenant prior to the institution of court action. N.J.S.A. 2A:18-61.2 provides the notice requirements. I have set forth below the text of the statute that describes the notice requirements for each section of the Anti-Eviction Act.

NJSA 2A:18-61.2. Removal of residential tenants; required notice; contents; service

No judgment of possession shall be entered for any premises covered by section 2 of this act, (2A:18-61.1) except in the nonpayment of rent under subsection a. or f. of section 2, unless the landlord has made written demand and given written notice for delivery of possession of the premises. The following notice shall be required:

a. For an action alleging disorderly conduct under subsection b. of section 2, or injury to the premises under subsection c. of section 2, or any grounds under subsection m., n., o. or p. of section 2, three days’ notice prior to the institution of the action for possession;

b. For an action alleging continued violation of rules and regulations under subsection d. of section 2, or substantial breach of covenant under subsection e. of section 2, or habitual failure to pay rent, one month’s notice prior to the institution of the action for possession;

c. For an action alleging any grounds under subsection g. of section 2, three months’ notice prior to the institution of the action;

d. For an action alleging permanent retirement under subsection h. of section 2, 18 months’ notice prior to the institution of the action and, provided that, where there is a lease in effect, no action may be instituted until the lease expires;

e. For an action alleging refusal of acceptance of reasonable lease changes under subsection i. of section 2, one month’s notice prior to institution of action;

f. For an action alleging any grounds under subsection l. of section 2, two months’ notice prior to the institution of the action and, provided that where there is a written lease in effect no action shall be instituted until the lease expires;

g. For an action alleging any grounds under subsection k. of section 2, three years’ notice prior to the institution of action, and provided that where there is a written lease in effect, no action shall be instituted until the lease expires.

h. In public housing under the control of a public housing authority or redevelopment agency, for an action alleging substantial breach of contract under paragraph (2) of subsection e. of section 2, the period of notice required prior to the institution of an action for possession shall be in accordance with federal regulations pertaining to public housing leases.

The notice in each of the foregoing instances shall specify in detail the cause of the termination of the tenancy and shall be served either personally upon the tenant or lessee or such person in possession by giving him a copy thereof, or by leaving a copy thereof at his usual place of abode with some member of his family above the age of 14 years, or by certified mail; if the certified letter is not claimed, notice shall be sent by regular mail.

NOTICE TO CEASE

Where a Notice to Cease is required, it should include as much detail as possible. This serves the dual purpose of putting the tenant on notice of a statutory (or lease) violation, and allows the tenant an opportunity to “cure” the alleged violation. If the tenant ceases the described wrongful conduct, a landlord may not proceed to terminate the tenancy. It is, in effect, a warning notice. By statute, the notice must be served upon the tenant or person in possession either personally at the demised premises, or by leaving it at “his usual place of abode with some member of his family above the age of 14 years or by certified mail; if the certified letter is not claimed, notice shall be sent by regular mail.” (See N.J.S.A. 2A:18-61.2 above.)

It is advisable to cover all 3 bases. The worst thing that can happen to a landlord’s case on the day of trial is to get “shot down” for defective service of a notice. If the notices are not correct (legally sufficient) or not properly served, the court must dismiss the landlord’s case. A defective notice or defective service is a jurisdictional defect. If a jurisdictional defect exists, the court must dismiss a plaintiff’s case.  Once dismissed, you must start all over.  Starting all over means months of additional lost rent.  It is important to stress that the acts complained of must be enunciated clearly and in detail. Remember N.J.S.A. 2A:18-61.2 says, “The notice in each of the foregoing instances shall specify in detail the cause of the termination of the tenancy…” The notice may not contain conflicting information. For instance, a Notice to Cease that contains a warning to a tenant not to pay rent late may not contain an additional notice that the tenant is obligated to pay late fees.

NOTICE TO QUIT

A Notice to Quit terminates the tenancy. If the tenant fails to cease the acts complained of in the Notice to Cease, after a reasonable period of time to cure has elapsed, or the statute does not require a cease notice, a landlord may serve a Notice to Quit for the statutory violation. Many landlords are under the mistaken impression that they must wait 30 days after serving a Notice to Cease before serving a Notice to Quit. This is just plain wrong. All that must elapse is a “reasonable” period of time and what is reasonable has to be determined on a case by case basis. The Notice to Quit also must contain a paragraph called “Demand for Possession.” A written demand for possession is required in all cases except for nonpayment of rent. If this language is lacking, the court will lack jurisdiction to hear the case. A Notice to Quit is generally served in the same manner as the Notice to Cease. (See above.) However, it is interesting to note that the statutes are silent as to how a Notice to Quit should be served.

NON-PAYMENT OF RENT

If a tenant fails to pay “rent” when due, a landlord may immediately proceed to commence a summary proceeding to regain possession of the premises. A landlord is under no obligation to wait for its rent, accept payments late, or accept rent in installments. However, if on the “return day” (day of court) the tenant appears and is prepared to pay all “rent” which is due, the landlord must accept the tender and dismiss the case.

N.J.S.A. 2A:18-55. Discontinuance upon payment into court of rent in arrears; receipt

If, in actions instituted under paragraph “b” of section 2A:18-53 of this title, the tenant or person in possession of the demised premises shall at any time on or before entry of final judgment, pay to the clerk of the court the rent claimed to be in default, together with the accrued costs of the proceedings, all proceedings shall be stopped. The receipt of the clerk shall be evidence of such payment. The clerk shall forthwith pay all moneys so received to the landlord, his agent or assigns.

(Case Law has held this statute is applicable to proceedings under the Anti-Eviction Act as well. (N.J.S.A. 2A:18-61.1.))

If a tenant agrees that certain charges constitute “additional” rent (i.e. utilities, damages, late fees) a court will likely enforce the agreement if it does not conflict with any statute, rule, regulation or ordinance such as rent control or U.S. Dept. of Housing & Urban Development regulations (”H.U.D.”).

Like almost any rule, there is an exception to the “no notice rule” for non-payment of rent cases. When filing a non-payment of rent case against tenants receiving (1) social security old age pensions, (2) railroad retirement pensions and (3) other government pensions, these tenants are afforded a 5 day grace period to pay their rent, presumably because their checks are sent to them on or about the first day of each month. (copy of the statute appears supra.) Likewise, tenants who participate in a H.U.D. subsidy program are entitled to the additional protection of federal laws that require a written notice be served upon the tenant prior to the filing of any action for eviction.

THE LANDLORD REGISTRATION ACT

By law, every landlord of a dwelling, except owner-occupied premises with not more than two rental units, must file with the clerk of the municipality in which the residential property is situated, or with the Bureau of Housing Inspection in the Department of Community Affairs, a certificate of registration. In court, a judgment for possession cannot be entered if the landlord has not complied with this registration requirement. Non-receipt of the statement is almost a standard defense by tenants who are represented by competent counsel to avoid an immediate judgment of possession. The court has the authority to stay the proceedings for 90 days to allow the landlord to come into compliance.

A landlord is well advised to consult competent counsel when seeking to properly terminate a tenancy.

At Hanlon Niemann we have experienced, qualified attorneys and para professional staff representing Landlords statewide who appear in the Landlord Tenant section of the New Jersey Superior Court every week.  Let our experience protect you.  Contact Christopher J. Hanlon at chanlon@hnlawfirm.com, Phone (732) 863-9900 Ext. 109, or Fredrick P. Niemann, fniemann@hnlawfirm.com, Phone (732) 863-9900 Ext. 105.

Fredrick P. Niemann, Esq. was recently the featured speaker in Colts Neck, NJ at a seminar entitled Investments & Estate Planning for Trusts and Wills for High Net Worth Individuals.  He spoke on the current state of federal and NJ tax laws and how to protect family assets from catastrophic illness.

If you would like Mr. Niemann to speak before your group or to your facility staff, please contact him at fniemann@hnlawfirm.com or 732-863-9900.  We can create an interesting, informative and customized seminar complete with Powerpoint presentation on many topics of interest to your organization.

PLEASE CONTACT FACILITY 24 HOURS IN ADVANCE TO CONFIRM.

UPCOMING SEMINARS

2008

VA Benefit Aid and Attendance
June 10th at 6:30 pm   
Open to all 
Seminar Location:  Sunrise at Wall
2600 Allaire Road, Wall, NJ  07719
(732) 282-1700

How to Pay For Assisted Living Without Going Broke
August 14th at 7:00 pm
Open to all
Seminar Location:  Sunrise at Lincroft
734 Newman Springs Road, Lincroft, NJ  07738
(732) 212-1910

VA Benefit Aid and Attendance
Apr 17th at 3:00 pm
Open to all    
Seminar Location:  Brighton Gardens
620 State Highway, 35 South, Middletown, NJ
(732) 275-0790

VA Benefit Aid and Attendance  
Mar 13th at 5:00 pm – 7:00 pm 
Open to community 
Seminar Location:  Kensington Court
864 Shrewsbury Avenue, Tinton Falls, NJ   07724
(732) 784-2400

Wills/Probate 
Feb 7th at 1:00 pm 
Open to residents 
Seminar Location:  Allaire Center Senior Day Care
1983 Route 34 South, Wall, NJ  07719
(732) 974-7666

Estate Planning and Asset Protection
Jan. 23rd at 2:00 pm
Open to community 
Seminar Location:  Chelsea Rest Home
352 Chelsea Avenue, Long Branch, NJ 07740
(732) 222-8125

VA Benefit Aid and Attendance
Jan 16th at 6:30 pm    
Seminar Location: 
Sunrise Assisted Living of Marlboro
3A South Main Street, Marlboro, NJ 07746
(732) 409-6665

2007
VA Benefit Aid and Attendance
Dec 19th at 11:00 am
Seminar Location:  The Wexford Assisted Living
2018 Highway 35, Spring Lake, NJ 07762

Mercer County Bar Association 
Topic:  Special Needs Trust,  
Guardianship, Living Wills & More
Nov 28th at 9:00 am 
Seminar Location:  Marriott Princeton Hotel
100 College Road East, Princeton, NJ 08540

RECENTLY ATTENDED PROGRAMS BY MR. NIEMANN

2008
Probate Symposium
NJSBA
Mar 13th
New Brunswick, NJ

NAELA Unprogram
Jan 25 – Jan 27
Grapevine, TX

2007
Mercer County Bar Association
Special Needs Trust, Guardianship,
Living Wills & More
Nov 28th
Princeton, NJ

NAELA Convention
Nov 1 – Nov 4
Memphis, TN

MPS Systems Boot Camp
Oct 24 – Oct 25
Orlando, FL

Veterans Benefit Institute
Sep 2007
Chicago, IL

Introduction: Special Needs Trusts can themselves be complicated and confusing. The rules governing their creation and administration, and the effect on public benefits eligibility of specific trust payments, can be even more complicated. Let us try to simplify some of the rules, particularly those governing provision of food and shelter to a Special Needs Trust beneficiary.

Background: A “Special Needs” Trust is one established for the benefit of an individual with a disability — as that term is defined by federal Social Security rules. Such a trust is not counted as an available resource for a Supplemental Security Income (SSI) or Medicaid recipient. Its primary purpose — whether funded by gifts from others or with the beneficiary’s own money — is to improve the individual’s quality of life without the loss of public benefits.
 
Where the assets come from is critical and determine how SSI and Medicaid will view the trust, but many of the rules are the same regardless of the source of funds. While the trust is not a resource, payments from the trust may be counted as income to the beneficiary depending on how and to whom the payments are made.

If a disbursement is made in cash directly to the beneficiary, the money received is unearned income that will reduce the individual’s monthly SSI benefit dollar-for-dollar, after considering any applicable exclusion. Of course, if the beneficiary’s income is from Social Security Disability, or from some other Social Security program that is not means-tested (and there are several), then payments to the beneficiary will not have any effect on the Social Security payments. That does not mean that such payments are a good idea, however, as they might still affect Medicaid eligibility. Besides, if the beneficiary’s disability has an effect on his or her ability to handle money, outright distributions may cause problems beyond their effect on benefits eligibility.

Direct payments to others: If disbursements are made from the trust to third parties that result in the beneficiary receiving non-cash items (other than food or shelter), the beneficiary receives in-kind income if the items would not be a partially or totally excluded non-liquid resource if retained into the month after the month of receipt. Take as an example a trust which buys a car for the beneficiary, even though the beneficiary’s spouse already has a car which is being excluded for SSI eligibility calculations. The second car is income in the month of receipt since it would not be an excluded resource in the following month.

In-kind Support and Maintenance (ISM): If disbursements are made from the trust to third parties that result in the individual receiving food or shelter, the individual is charged with the receipt of income in the form of “in-kind support and maintenance.” Rather than causing a dollar-for-dollar reduction in benefits for the value of the ISM payment, however, it is valued at no more than the “presumed maximum value,” a concept unique to SSI regulations. The presumed maximum value is calculated each year for all SSI beneficiaries by dividing the maximum SSI payment ($637 in 2008 for a single person, and $955 for a married couple) by three, and then adding $20.00. That means that the “presumed maximum value” for 2008 is $232.33 for an individual and $338.33 for a couple.

For purposes of calculating this reduction, the notion of “shelter” which might be provided by in-kind payments includes only the following household operating expenses:

•    Mortgage payments
•    Home insurance (but only if it is required by the terms of a
      mortgage)
•    Rent
•    Real property taxes
•    Heating fuel
•    Gas
•    Electricity
•    Water
•    Sewer, and
•    Garbage removal.

Other in-kind payments from the trust: Other direct payments from the trust to providers do not result in the receipt of support and maintenance and are not treated as income for SSI purposes. Those disbursements might include payments for educational expenses, therapy, medical services not covered by Medicaid, phone bills, recreation, entertainment, therapy, companionship, and many other beneficial services.

If payments from the trust to a third party result in the beneficiary receiving non-cash items other than food or shelter, they will not be counted as income when the item would become a totally or partially excluded non-liquid resource if retained into the month after the month of receipt. For example, if the trust purchases a computer for the beneficiary, there would be no affect on SSI or Medicaid benefits. Since the computer would be excluded from resources as household goods in the following month, the computer is not  income. The same principles would apply to purchases of furniture, adaptive or assistive devices, clothing and other goods.

Summary: This explanation of the “in-kind support and maintenance” rules may seem confusing, but the application and effect are straightforward. If a Special Needs Trust purchases services directly, the purchase will not cause a reduction or loss of the beneficiary’s SSI benefits. If the trust purchases goods that are exempt from being counted as assets, there should again be no effect. If, however, the trust pays for housing-related expenses or food, there may be a reduction in benefits and, in some limited cases, even a complete loss of eligibility. Similarly, purchase of non-exempt assets that could be converted to food or shelter will cause problems.

Of course, the best choice for the trustee of a Special Needs Trust is to seek competent legal advice before making a decision about paying any in-kind goods or services. A good special needs attorney will be able to explain the effect of proposed payments not only to the trustee, but also to the beneficiary and his or her family, who may have expectations that simply can not be met given the constraints of public benefits eligibility rules.

If you have any questions concerning a Special Needs Trust, click here to contact us.

The federal Centers for Medicare & Medicaid Services (CMS) has announced that its Web site comparing nursing homes will now identify facilities that are on its list of those that have a history of poor performance.

From now on, the agency’s Nursing Home Compare site will point out nursing homes that it calls Special Focus Facilities — those that have repeated violations of state and federal health and safety rules and that rank in the worst 5 percent to 10 percent for inspection results in a given state. CMS released the names of the 131 SFF facilities earlier this year, but this is the first time they will be included on the Nursing Home Compare site. 

The troubled facilities are identified by a small “2″ in superscript next to a facility’s name.
A Wall Street Journal article on the CMS decision notes that “consumer groups and nursing home officials warn, however, that nothing can substitute for visiting a nursing home in person.” The article also highlights a free Web site MemberoftheFamily.net that features easy-to-read, color-coded assessments of nursing homes nationwide.

The Journal article observes that CMS began making some of the information about problematic nursing homes public last fall after pressure from Sens. Herb Kohl (D-WI) and Charles Grassley (R-IA). The senators are sponsoring a bill that would force CMS to reveal even more data about nursing homes and Grassley is trying to get the provisions added to a Medicare-related bill expected to pass Congress by July 1.

On March 12, 2008, Washington State Governor Christine Gregoire signed into law House Bill 3104, extending 170 legal rights and responsibilities to couples in domestic partnerships (same- or opposite-sex relationships). Among the new responsibilities is that the state will treat surviving members of the couple the same as surviving spouses of married couples for purposes of estate recovery by Medicaid.

The new law, which takes effect June 12, 2008, prohibits recovery by Medicaid if the agency would not have been permitted to recover from a surviving spouse in similar circumstances.

Did you elect to take Social Security benefits before your full retirement age? If you did and are now looking for extra income, there may be an answer. Once you reach full retirement age, you can pay back the money you have received and reapply for full retirement benefits.

Although you can collect Social Security benefits between age 62 and your full retirement age, if you do, your benefits will be lower. For example, if you were born in 1944 and decide to retire at age 62, four years before your full retirement age of 66, your total benefit reduction is 25 percent. If your full benefit was to be $1,000 a month, your reduced benefit will be $750.

A little-known provision of Social Security allows you to withdraw your application for early benefits and reapply for your full benefits. The catch is that you must be able to pay back all the money you received so far. However, because you do not have to pay any interest on the benefits you received, if you can find the money to repay the benefits, it may be worth it. You could think of it as an interest-free loan.

Articles on the potential benefits of withdrawing your early Social Security benefit from USA Today and MSN have examples of how it works.

Click here to download the withdrawal of application form.

It is not uncommon for the elderly to become victims of financial abuse. They may be losing — or already have lost — some of their cognitive ability, and their judgment may be clouded. The perpetrator can be anyone from a stranger to a friend, caretaker, relative, or trusted financial advisor.

“As people grow older, they grow dependent on others for care, and part of that care means someone must help them with their finances,” says Larry Pickard, who supervises the unit that deals with financial abuse of the elderly at San Francisco Adult Protective Services.

I have seen this financial abuse in the course of my own work helping the elderly organize their finances.

Recently, Mr. Smith (all names in this article have been changed) was 101 years old and living independently in an upscale facility in Fairfield County, Connecticut. None of his children or relatives lived nearby. About three years ago, a family friend started helping him with his bill-paying and financial organization.  He visited him twice a month to sort through his mail and help him decide what was junk and what he needed to read. He also took all the bills back to my office to prepare the checks. During the entire time he worked with him, Mr. Smith was very independent, but he was starting to slow down physically. A few months ago, he fell, and it became obvious that he needed 24/7 care to stay out of assisted living. He gave in to having what he referred to as “24-hour surveillance.”

The home health aide, Maria, came from an agency and was recommended by the facility. She took good care of Mr. Smith, helping him bathe and dress, and staying constantly by his side. She won his trust and confidence. But then . . .

Maria started having Mr. Smith write checks payable to cash for drug store supplies and the few groceries he needed. She also started paying some of the bills, which the family friend believed is how she convinced him to sign the checks over to her. Maria then endorsed the checks with her own signature and deposited them to her own checking account. Since the family friend wasn’t a signer on his checking account, he didn’t notice this until it was too late. By the time the bank statement arrived, there was a total of $16,000 in either forged checks or checks Mr. Smith had been coerced to sign.

The family friend reported this to the police and Maria was fired from the agency. Since the agency was bonded, it had to make good on the losses. Unfortunately, Mr. Smith was devastated to learn that someone he trusted took such advantage of his sweet, trusting, and generous nature. A few weeks later, Mr. Smith passed away. It was terrible for him to spend his final weeks knowing about this crime.

Family Members Often the Culprits

Financial abuse of the elderly knows no boundaries. It can occur when someone steals or embezzles money, Social Security checks, or other property from an older person. It can be as simple as taking money from a wallet or manipulating a victim to turn over or sell personal property or belongings. In many cases, the financial abuse is done by someone the victim knows and trusts. Family members commit more than half of the crimes of financial abuse of the elderly, according to the National Association of Adult Protective Services Administrators.

Sometimes the abuser has gambling, substance abuse, or financial problems. After Mrs. Green’s daughter passed away suddenly at age 50, her teenage granddaughter stole her grandmother’s credit cards and charged, with interest, more than $20,000. Mrs. Green’s surviving daughter took her mother’s medications to feed her own substance abuse problem. This daughter also stole money, perhaps thinking it was “rightfully” hers. Mrs. Green could barely make ends meet, and the fact that her own relatives were stealing from her made it even worse.

Often the elderly are afraid to report this abuse, fearing that their children will consider them too demanding or unfit to handle their finances. They may fear losing an important part of their independence and can be embarrassed that they can’t handle the situation themselves. Mrs. Green did not want to report these crimes, because she was afraid of alienating her only surviving daughter and getting her granddaughter into more trouble. She was also depressed over the loss of her daughter.

Americans over the age of 55 control 70 percent of the nation’s wealth. Many of the elderly do not realize the value of their assets and how those assets make them vulnerable. A recent FBI investigation found that fraudulent telemarketers were directing nearly 80 percent of their calls to seniors; the elderly are often dependent on others for help, and a “helpful” voice at the end of the telephone line can exert a significant influence.

How to Detect Financial Abuse and What to Do About It

There are many signs to watch for in detecting financial abuse of the elderly. Someone could force an elderly person to sell or give away property or to sign a power of attorney. Valuable objects may start to disappear. There may be unusual activity in bank accounts, such as sudden withdrawals of large amounts, many checks made out to cash, and low bank balances when there should be plenty of available funds. A new “best friend” or “sweetheart” might appear on the scene. Signatures on checks do not resemble the older person’s signature. A name may be added to an older person’s bank account.

There are several ways to prevent this financial abuse. One way is to have several family members be involved with the older person. Encourage the elderly to become involved with the community, senior centers, or religious groups, which all can provide a strong support system. Take advantage of direct deposit of income checks, including Social Security and dividends. Carefully screen and verify caregivers’ references and do a thorough background check.

Advocates for Nursing Home Reform estimate that only one in six cases of financial abuse is ever reported. Any person who suspects that financial abuse has occurred should report it either to her local police department or to a trusted social worker or adult child, assuming the child is not also the abuser. When in doubt, err on the side of caution. Financial abuse can continue and can escalate if there is no intervention. Reporting the abuse and intervening in time can save the assets, health, and dignity of the elderly. 

If you have questions about this article, contact Fredrick P. Niemann, Esq. at FNiemann@hnlawfirm.com or call him at 732-863-9900.

While you generally do not have to sell your home in order to qualify for Medicaid coverage of nursing home care, it is possible the state can file a claim against your house after you die. If you get help from Medicaid to pay for the nursing home, the state must attempt to recoup from your estate whatever benefits it paid for your care. This is called “estate recovery,” and given the rules for Medicaid eligibility, the only property of substantial value that a Medicaid recipient is likely to own at death is his or her home. If possible, you should consult with an attorney before entering a nursing home, or as soon as possible afterwards, in order to discuss ways to protect your home.

In those states that have implemented the Deficit Reduction Act of 2005, the home is not counted as an asset for Medicaid eligibility purposes if the equity is less than $500,000 ($750,000 in some states). In all states, you may keep your house with no equity limit if your spouse or another dependent relative lives there.

Transferring a Home
In most states, transferring your house to your children (or someone else) may lead to a Medicaid penalty period, which would make you ineligible for Medicaid for a period of time. There are circumstances in which it is legal to transfer a house, however, so consult an attorney before making any transfers. (For example, transfers to a disabled child or one who qualifies as a “caregiver child” are permitted.) While you can sell your house for fair market value, it may make you ineligible for Medicaid and you may have to apply the proceeds of the sale to your nursing home bills.

Lien on Home
Except in certain circumstances, Medicaid may put a lien on your house for the amount of money spent on your care. If the property is sold while you are still living, you would have to satisfy the lien by paying back the state. The exceptions to this rule are cases where a spouse, a disabled or blind child, a child under age 21, or a sibling with an equity interest in the house is living there.

Estate Recovery
If your spouse, a disabled or blind child, a child under age 21, or a sibling with an equity interest in the house, lives in the house, the state cannot file a claim against the house for reimbursement of Medicaid nursing home expenses. However, once your spouse or dependent relative dies or moves out, the state can try to collect.

But there are some circumstances under which the value of a house can be protected from Medicaid recovery. The state cannot recover if you and your spouse owned the home as tenants by the entireties or if the house is in your spouse’s name and you have relinquished your interest. If the house is in an irrevocable trust, the state cannot recover from it.

In addition, some children or relatives may be able to protect a nursing home resident’s house if they qualify for an undue hardship waiver. For example, if your daughter took care of you before you entered the nursing home and has no other permanent residence, she may be able to avoid a claim against your house after you die. Consult with an attorney to find out if the undue hardship waiver may be applicable.

Besides cancellation-of-debt relief, the Mortgage Forgiveness Debt Relief Act of 2007 has other provisions that might prove helpful to you.

More time for surviving spouses
You can exclude $250,000 worth of gains from the sale of your home.  Married couples filing jointly get an even better break:  They can exclude up to $500,000 of gains as long as both spouses occupied the house as a principal residence for at least two years (730 days) of the five years preceding the sale.

That sounds fine, but what if a hypothetical Beth Williams died in late 2007, and her widower Bob decides he wants to sell the big house in which they lived.  Under federal law, as an unmarried surviving spouse, Bob would be able to claim the larger exclusion available to married couples only if he sold the house within the calendar year of the deceased spouse’s death.  As a result, many surviving spouses had to settle for a $250,000 exclusion rather than a $500,000 exclusion.  That’s not the case under the new law.  Effective for sales after 2007, an unmarried surviving spouse can exclude up to $500,000 worth of gains on a home sale, providing the sale occurs within two full years of the spouse’s death.