Massachusetts Estate Planning & Asset Protection Blog

Massachusetts Estate Planning Attorney | Can I Transfer My Home To My Child Who Lives With Me and Still Get Medicaid? (Part 2)

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, Oct 03, 2012

Earlier this week we were discussing Linda’s mistake of confusing Medicaid’s exempt asset rules vs. the transfer of assets rules.  Mom transferred her home to Linda 4 years ago and now needs Medicaid.  If she applies now there will be a Medicaid penalty, a period of ineligibility.  There are, however, exceptions to this rule.medicaid, elder law, estate planning

I asked Linda if she had been deemed disabled by Social Security at the time of the transfer.  Transfers to a disabled child are an exception to the transfer rules and carry no penalty.  Linda told me she was not disabled.  She has a full time job.

I then told Linda that there is another exception that permits the transfer of the home to a child who has lived with the parent for at least 2 years and provided nursing home level care to the parent during that time.  Linda immediately perked up when she heard that.  “I’ve been caring for Mom longer than that,” she told me.

“Well, not so fast,” I said.  “You must have provided a level of care such that, if you weren’t administering it Mom would have needed to be in a nursing home.”  Linda told me that she works 9 to 5, leaving Mom at home alone, but cares for her the rest of the day and overnight.  I explained that if Mom really needed nursing home level care she could not have been left home alone.  You must show that she needed 24/7 round the clock care.

I have had many children ask me about this exception, but usually after the fact, meaning, just as in Linda’s case, after the home has already been transferred.  The State will scrutinize this exception very closely.  You must establish at the beginning of the 2 year period that Mom needs nursing home level care.  It is a good idea to get an examination and written opinion from a physician.  You must also establish that you, the child, are providing nursing home level care.  The biggest problem there is when the child tells me that while he works during the day, he takes care of Mom at night.  Think about it.  That won’t work.  Nursing homes don’t leave their residents unattended for 8 to 10 hours a day.  So that won’t fly with Medicaid.

Linda wasn’t thrilled with the answers I gave her and I knew what her next question would be.  “So, what do I do now?,” she asked.  “Mom needs nursing home care and she has no money.”

“You’ve got another 12 months to go before the home transfer falls outside the 5 year Medicaid lookback,” I told her.  I then went through some options.  She could transfer the home back to Mom, undoing the transfer and apply for Medicaid.  She could keep Mom at home and pay for her care for a year and then apply for Medicaid.  Another option is to sell the home and use some of the proceeds to pay for Mom’s care in the nursing home for a year until Medicaid eligibility.

Which option is the best would be dependent on the cost of each and Linda’s ability to pay and whether it is safe for Mom to remain at home.  I also cautioned Linda that while we were focusing on the home transfer there could very well be other transfers during the past 5 years that could trigger additional penalties.  I suggested that we conduct a review of Mom’s financial records now to determine any other problems and fix them now, before any application is filed.  Linda readily agreed.

For more information about Medicaid, you can gain free online access to the “Seniors’ Guide to Health Care Reform & Avoiding Nursing Home Poverty” which also contains secret benefits revealed by the Affordable Care Act.

Click Here to Download the Senior & Boomers Guide to Health Care Reform & Avoiding  Nursing Home Poverty

 

At the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates, we help people and their families concerned with losing their homes and life savings to increasing medical and nursing home costs, taxes and the costs and time delays of probate. We also protect clients from losing control of their own health and financial decisions.

We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at www.SeniorWorkshop.com

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: Estate Planning, Medicaid, MassHealth, Health Care, Massachusetts, exempt, Nursing Home, Medicaid penalties, transfer

Massachusetts Estate Planning Attorney | Can I Transfer My Home to My Child and Still Get Medicaid?

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Mon, Oct 01, 2012

Medicaid, estate planning attorney, MassachusettsCan I transfer my home to my child who lives with me and still get Medicaid?

The following case is a prime example of how a little bit of information can be a dangerous thing.  Mom transferred her home to Linda 4 years ago.  Mother and daughter had been living in the home for years.  “Since I am living in the home isn’t it an exempt asset?” Linda asked.  “Yes, it is,” I told her, “but that doesn’t mean Mom can transfer it to you.”

What Linda did is confuse the rules on exempt assets with the rules on transferring assets.  If Mom needs nursing home care and applies for Medicaid, the State will not force the sale of the home if Linda has been, and continues to, live in it.  In other words, it won’t require the sale proceeds to be spent on Mom’s care before it will approve her Medicaid application.

Keep in mind that if Linda lives there, she can’t use any of Mom’s income to pay for taxes, insurance and upkeep.  That income must go to the nursing home.  Linda must pay the expenses herself, but she can continue to live there.  After Mom passes away the State will place a lien on the home to recoup the benefits it paid out during Mom’s life, but Linda can continue to live there (assuming she is the person who inherits the home from Mom) and the State will wait until the home is sold to be paid back.

Now, here’s where Linda made her mistake.  She figured that if the home is exempt as long as she is living there, Mom can transfer ownership to her and still qualify for Medicaid at any point in time.  That is incorrect.  Transferring an exempt asset is still subject to the 5 year lookback and a potential Medicaid penalty.

If Mom’s house is worth $400,000, the transfer to Linda results in a potential penalty of 48 months.  This means that if she applies for Medicaid now, 4 years after the transfer, she will be ineligible for Medicaid for 48 months.  “Are there any exceptions to this rule?,” Linda asked.

“There are a few,” I told her.  Next week we will share with you what they are.

For more information about Medicaid, you can gain free online access to the “Seniors’ Guide to Health Care Reform & Avoiding Nursing Home Poverty” which contains secret benefits revealed by the Affordable Care Act.

Click Here to Download the Senior & Boomers Guide to Health Care Reform & Avoiding  Nursing Home Poverty

At the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates, we help people and their families concerned with losing their homes and life savings to increasing medical and nursing home costs, taxes and the costs and time delays of probate. We also protect clients from losing control of their own health and financial decisions.

We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at www.SeniorWorkshop.com

 

Tags: Estate Planning, Medicaid, Massachusetts, exempt, non-exempt, transfer of assets, Medicaid penalties, transferring

Massachusetts Elder Law Attorney | The Basics of Medicaid

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Thu, Sep 13, 2012

In order to understand the process of Medicaid qualification, you first need to know how Medicaid treats your assets.

Basically, Medicaid breaks your assets down into two separate categories. The first are those assets which are “exempt” and the second are those assets which are “non-exempt” or countable.medicaid, senior

Exempt assets are those which Medicaid will not take into account (at least for the time being). In Massachusetts, generally the following assets are exempt:

  • The home, with an equity value up to $750,000. The home must be the principle place of residence. The nursing home resident may be required to show some “intent to return home”, even if this never actually takes place.
  • Household and personal belongings, such as furniture, appliances, jewelry and clothing.
  • One vehicle, there may be some limitation on value.
  • Prepaid funeral plans and burial plots.
  • Cash value of life insurance policies, as long as the face value of all policies added together does not exceed $1,500. If it does exceed $1,500 in total face amount, then the cash value in these policies is countable. Also, term life insurance is exempt.
  • Cash (e.g. a small checking or savings account) not to exceed $2,000 in Massachusetts.

These are basically the assets which Medicaid will ignore, at least for now. Keep in mind, however, that the estate recovery unit may come back to recoup payments made to Medicaid recipient after the death of the recipient and the recipient’s spouse if they are married.

All other assets which are not exempt (i.e. the ones not listed earlier) are countable. This includes checking accounts, savings accounts, certificates of deposit, money market accounts, stocks, mutual funds, bonds, IRA’s, pensions, second cars and so on. While there are some minor exceptions to these rules, for the most part, all money and property, as well as any item that can valued an turned into cash is a countable asset, unless it is one of those listed earlier as exempt.

While the Medicaid rules themselves are complicated and somewhat tricky, for a single person it’s safe to say that you will qualify for Medicaid so long as you have only exempt assets plus a small amount of cash.

For a married couple, the community spouse (i.e. the one not needing nursing home care) can generally keep one-half of the assets up to a maximum of just about $113,640. Of course, this does not mean there are not things which can be done to protect assets beyond these levels. Instead, this information is designed to review the basics in a way which a caseworker would do so.

For more information, you can gain free online access to the “Seniors’ Guide to Health Care Reform & Avoiding Nursing Home Poverty” which contains secret benefits revealed by the Affordable Care Act.

At the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates, we help people and their families concerned with losing their homes and life savings to increasing medical and nursing home costs, taxes and the costs and time delays of probate. We also protect clients from losing control of their own health and financial decisions.

We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at www.SeniorWorkshop.com

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Register NOW and receive a free Unique Self-Guided 19-Point Trust, Estate, & Asset Protection Legal Guide with accompanying DVD, absolutely free.

 

Tags: Estate Planning, Medicaid, Massachusetts, medicaid qualification, exempt, non-exempt

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