Massachusetts Estate Planning & Asset Protection Blog

Is your Planning Stuck in Limbo? (part 2)

Posted by Dennis Sullivan & Associates on Tue, Aug 01, 2017

How does the debate over health care reform affect you and your estate plan?

35274856603_c2af85ca10_b.jpg In our last post we discussed the importance of keeping up with the constant changes happening in health care reform. We will continue to examine how the on-going deliberations in Washington may affect you, your future health care and your estate.  We at Dennis Sullivan & Associates are keeping up to date on all the changes, and making sure you stay informed on all the important details.  For more information on the current law of the land, you can download our Report: Senior & Boomers Guide to Health Care Reform.   

The Senate has dealt a devastating setback to Republican efforts to repeal and replace Obamacare, defeating a GOP "skinny repeal" bill early Friday morning. With the "skinny repeal" bill off the table, lawmakers are unsure of where the health care debate is headed. 

Senate Majority Leader McConnell and his staff are trying to find a balance between conservative Republicans, who want a full repeal of ObamaCare and a replacement that has lower health care costs, and more moderate Republicans who want to preserve its more popular benefits.

The deal-making process is in full swing, with the additions of opioid funding and allowing health savings accounts to be used to pay for insurance premiums. Some Senators are for potentially leaving in some taxes to pay for more generous benefits, after weeks of being criticized by Democrats for offering “tax cuts for the rich and Medicaid cuts for the poor.” Conservatives want to cut more from the regulations and many from Medicaid expansion states are uneasy about future cuts to Medicaid.

Senator Ted Cruz of Texas has offered an amendment called the “Consumer Freedom Option” that would allow insurance companies to sell any health coverage plan they wish as long as they provide one plan that satisfies the “essential benefits” mandates of Obamacare. While the Cruz amendment appeals to conservatives who want to provide consumers with lower cost options, moderates are concerned it could negatively impact those with pre-existing conditions. Supporters have suggested that federal subsidies could help ensure that premiums don’t increase for those who are seriously ill. The CBO is currently scoring this amendment.  

President Trump, along with Senator Rand Paul of Kentucky and Senator Ben Sasse of Nebraska, has even offered to repeal ObamaCare for now and replace it later.

Of course, no one is going to get everything they want so there must be compromises. Majority Leader McConnell has said that if the Senate is not able to pass a bill soon, Congress will have to pass a bipartisan measure to shore up the imploding health insurance markets.

And so, the Civics lesson continues. The process is at work.  As we see here the process can be long, unstable and worrisome.  Luckily for you your estate planning doesn’t have be. We at Dennis Sullivan and Associates make your estate planning and asset protection worry and stress free.  Once you have a plan in place you will feel confident knowing it will protect you, your family and your life savings.  You can enjoy life to the fullest knowing you and your family are protected no matter what unknowns lay ahead. 

 

At the Estate Planning & Asset Protection Law Center, we help people and their families protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

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

Tags: Affordable Health Care, Affordable Health Care Act, Announcements, Elder Law, Estate Planning, Financial Planning, Health Care, Health Care Ruling, Medicaid, Medicare, Obamacare, Retirement, applying for medicare, Medicaid penalties, care costs, care, coverage, coverages, disenrollment, elder care, enrollment, elder care journey, federal, health, health Care act, life-care plan, long term care, medicaid qualification, medical expenses, proposed changes, senior, unreimbured medical expenses, seniors

Is your Planning Stuck in Limbo?

Posted by Dennis Sullivan & Associates on Thu, Jul 27, 2017

How does the debate over Health Care Reform affect you and your estate plan?

Everyone is talking about health care reform: whether it’s the House bill, Repeal & Replace, Skinny Repeal, it can make your head spin.  One question on everyone’s mind is how changes to health care will affect them.  We at Dennis Sullivan & Associates are keeping up to date on all the changes, and will cover the process through a series of blogs to explain where health care reform is now, how it affects you and what the future may hold.  For more information on the current law of the land, you can download our Report: Senior & Boomers Guide to Health Care Reform

 


Senate pic-1.jpg

Eventually, both the House and Senate must vote on the same bill.

The battle continues in Washington over the repeal or replacement of the Affordable Care Act (ObamaCare) and as we are witnessing; this can be a messy process. 

Why Republicans are trying so hard to repeal and replace ObamaCare and how they are going about it:

ObamaCare, you may remember, was passed by the Democrats in 2010 with no Republican support. Ever since, Republicans have campaigned on repealing the program, which was unpopular with many Americans. “Repeal and Replace” was their rallying cry to voters to help them win back control of the House in 2012, then the Senate in 2014, and finally the Presidency in 2016. If the Republicans are not able to fulfill this major promise, some may be in danger of losing their seats in the next election, as they would likely be blamed for the problems with ObamaCare if they don’t fix them. These are the political reasons.

Democrats admit that ObamaCare has problems and needs a major fix to survive. But they are not on board with repeal and replace of such a signature piece of legislation, while Republicans try to find a way to pass new legislation.

The Legislative process:

The normal legislative process is that a bill begins in the House, where it is written, discussed and approved by a committee before the House votes on it. If it passes the House, it is then sent to the Senate. The Senate can vote on the same bill, make amendments to the House bill, or create its own bill. Eventually, both the House and Senate must vote on the same bill, so if there are differences, members of both the House and Senate meet in committee to resolve them. Once a bill passes both the House and Senate, it is then sent to the President who can sign it into law or veto it.

Right now, there is a House bill on health care that has passed the House, and a Senate bill that has not passed the Senate. Discussions and amendments are still occurring with the Senate bill in hopes it will pass soon. The public posture is that this messy legislative process is making the bill better.

Further complicating this process is that while the Republicans have a majority in both the House and the Senate, they only have 52 Republican Senators. 60 votes are required to overcome the filibusters and pass new legislation, so they are attempting to pass health care legislation through the Budget Reconciliation process. It only requires 51 votes, but it limits the legislation to budget-related items only. They would not be able to include provisions some Republicans want in a full repeal and replace bill—for example, letting insurance companies sell across state lines to increase competition, lower prices and create better plans; and allowing the government to negotiate lower drug prices. Issues like these would have to be voted on later.

For the Senate bill to pass in Reconciliation, 50 Republicans must vote for the bill, since no Democrat or Independent is expected to vote for the bill. Vice-President Pence would break the tie if needed.

So far:

The Senate rejected a proposal from Republican lawmakers to repeal Obamacare on Wednesday July 26, 2017, marking a significant milestone in the Republican Party's years-long political crusade to gut former President Barack Obama's legacy health care law.

 

What does the future hold?

We aren’t sure what the future American Health Care Act is going to look like, not sure anyone does, but luckily protecting yourself and your loved ones from expensive long term care doesn’t have to be so uncertain.  With asset based long term care products, there are ways to insure your control over your future long term care and insure you have something left over for your spouse, children and loved ones. Don’t let your long term care plan sit in limbo. Stay tuned we will discuss more about what the future looks like in our next blog post.

 Click here for more information on  Estate Planning and Asset Protection

At the Estate Planning & Asset Protection Law Center, we help people and their families protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

If you would like more information on Medicaid, the Affordable Care, or the impact of new health care laws on your planning, request your free preview of our guide, the Senior & Boomers’ Guide to Health Care Reform & Avoiding Nursing Home Poverty. 

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: Affordable Health Care Act, Announcements, Dennis Sullivan, Elder Law, Estate Planning, Estate Planning Recommendations, Estate Planning Tip, Financial Planning, Health Care, Health Care Ruling, Medicaid, Medicaid penalties, Medicare, Obama, Obamacare, Retirement, care costs, coverage, unreimbured medical expenses, surviving spouse, senior, coverages, applying for medicare, elder care

The Pit Falls of Do-It-Yourself Medicaid Planning

Posted by Dennis Sullivan & Associates on Fri, Nov 07, 2014

The Pit Falls of Do-It-Yourself Medicaid Planning | Massachusetts Elderlaw Attorney

 

Carrier_Nursing_Home_Poverty 

Off To A Good Start

We got a call the other day from Ben.  He had prepared and filed his mother’s Medicaid application himself.  From what he told us, it sounded like he did a great job.

He had hit a bit of a snag because Ben and his brother had been helping Mom out with her expenses.  At first, the Medicaid caseworker treated the transfers into Mom’s account as additional income to her.  However, Ben was successfully able to prove that the money was given to Mom to help pay some of her medical expenses.  It wasn’t support and shouldn’t affect her Medicaid eligibility.  He was successful and Medicaid was approved.

So Why Was He Calling?

Ben was calling us because his mother had inherited $75,000 from a family member. The first thing he wanted to know was whether there was any way they could keep the money.  His thinking was that the inheritance would act as a reimbursement by Mom to Ben and his brother.

I told him that unfortunately I didn’t think it would work that way.  The lesson here is that if Ben had consulted with us before he applied for Medicaid we would have taken steps to make sure that he could recoup some of the funds in the event that something like this happened. The reason his plan wouldn’t work is because he didn’t document that the money he gave to his mom was a loan.  He said that he never could have foreseen that his mother could ever pay back the money and that at the time; he didn’t see the need to write up a contract. Unfortunately, from a Medicaid perspective, the Commonwealth of Massachusetts presumes that the money given to Mom is either income to support her, or a gift.

This Is Why You Should Consult A Professional

Remember, I told you that when Ben applied for Medicaid, the caseworker tried to peg it as income.  Ben successfully fought that.  However, he didn’t see the gift vs. loan issue coming.    Not knowing the Medicaid rules as I do, how could he have?  Without a written agreement at the time he gave Mom the money, the presumption is that there was never an intention for Mom to pay her sons back, making any attempt now to do so a transfer subject to a Medicaid penalty.

Ben didn’t like my answer and tried to find a way around the system.  “What about if Mom refuses to accept the inheritance,” he asked.  “It would then pass to my brother and me.”

Disclaimers May Not Apply

Ben is referring to what is known as a disclaimer.    A disclaimer is a legal statement filed by the heir who says, “I am supposed to receive this gift but I don’t want it”.  Mom would be treated as having predeceased (died) before the relative leaving her the $75,000.  Under his will, that money would have passed to Ben and his brother.

Sounds great so far doesn’t it, but it won’t work.  By refusing to accept the money, Medicaid treats it as if Mom took the inheritance and gave it away.  It is no different than if she accepts it and then turns around and gives it to her children.  It causes a Medicaid penalty either way.

So where does that leave Ben?  He and Mom have two very unappealing choices.  She can accept the money, come off of Medicaid and spend the money down and then reapply.  Or, she can stay on Medicaid and give all the money to the State of Massachusetts.   Tough choices, I know.  But, that’s what makes Medicaid so tricky when you are trying to navigate it alone, and why we always recommend professional guidance on your Medicaid journey.

 

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At the Estate Planning & Asset Protection Law Center, we provide a unique education and counseling process which includes our unique 19 Point Trust, Estate and Asset Protection Review to help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones, click here for more information. We provide clients with a unique approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

 

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

Tags: Medicaid, family, Medicaid penalties, medicaid qualification, Inheritance

Can Your Will Protect You When You Don't Die?

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Thu, Aug 07, 2014

 

What Happens When You Don’t Die?

medicare, medicaid, wills, spouse

 

Is your “I love you” will capable of protecting you or your spouse from long-term care costs?

You know the kinds of wills we’re talking about: The husband leaves everything to the wife, the wife leaves everything to the husband and after they both die, everything goes to the kids. This works well in situations where the spouses are healthy one day and are deceased the next. 

However, as most of us know, life usually doesn’t work that way very often. Research indicates that nearly 70% of individuals over 65 will require some kind of long-term care in their lifetimes.

Thus, many spouses worry that if they predecease an ill spouse who is currently in a nursing home or will require long-term care at some point in the near future, there will be insufficient funds available to provide for their institutionalized spouses’ needs. This is an especially relevant concern for expenses that are not covered under Medicaid such as: care managers, private nurses, single rooms, as well as certain therapies and drugs.

Another concern is that the availability of funds from “I love you” wills and trusts will disqualify the surviving ill spouse from eligibility for Medicare benefits. As you know from prior articles, Medicare (MassHealth in Massachusetts) is the only long-term-care governmental program in the United States and does not cover long-term custodial care.

To solve this problem many of our clients rely on a “testamentary trust”. This is a trust built into the will of each spouse. For many estate planners, this is counterintuitive because much of the estate planning occurs within the context of a revocable living trust. In order to preserve access to Medicaid eligibility without requiring that the surviving spouse spend down the assets and lose the chance to maintain a “rainy day fund”, creating a testamentary trust in the will of the pre-deceasing spouse is essential.

What this means is that around age 55, you have to completely revise your wills and trusts to accommodate a different paradigm of thought. The thinking process is no longer “What happens when I die?” Now the question becomes “What happens if I don’t die and live a long time with expensive long-term care?”

The new paradigm requires a new estate plan. If you consider yourself middle-class (meaning that your net worth will be significantly impacted by the cost of long-term care for you and/or your spouse) and are over age 55, we suggest that you revise and update your estate plan to reflect your current and future needs as soon as possible.

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

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

Tags: will, living will, Estate Planning, Estate Planning, Alzheimer's Disease, Elder Law, asset protection, long term care, Medicaid, in-home care, Health Care, estate reduction, estate, elder care journey, hospice, Alzheimers Disease, medicaid qualification, Wills, assets, Medicaid penalties, alzheimer's activities, in home, incapacity, Elder Law, Attorney, myths, Alzheimer's, alzheimers, financial, Attorney, income, Alzheimer's, federal, health, surviving spouse, in-home care, long term care insurance

What To Do When Medicaid Comes For You Part 2

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, Apr 09, 2014

Medicaid, Masshealth, Estate Planning

Last time I was telling you about Noah’s problem with Medicaid.  After his Dad died he received a Medicaid estate recovery letter from the State of Massachusetts looking to recoup $150,000 in benefits.

He was not happy when I explained to him that under Medicaid rules they are owed that money.  When Noah purchased Dad’s house, he did not pay fair market value for it.  That’s because he reduced the purchase price by $300,000 to pay for repairs and upgrades that benefitted Noah, not Dad.  In essence, Dad made a transfer for less than fair value which is subject to a Medicaid penalty.

So, why then did Medicaid approve the application and pay for Dad’s care for 3 years?  Because the state never came back to check on whether the home was sold.  Remember I told you that Noah first put the home on the market to try to sell it so the State processed Dad’s application and approved it.  They just never checked backed to see the status of the sale until after Dad died.

It’s never easy telling someone they have a $150,000 bill to pay but Noah was actually financially much better off than had he sold the home for fair market value before applying for Medicaid.  If he sold the home and netted $300,000 for Dad before he applied for Medicaid, then that money would have been spent on Dad’s nursing home care at a rate more than double what the State was paying.  In approximately 2.5 years the money would have run out, at which time Noah would then have filed a Medicaid application.

Instead, he applied for Medicaid before the house sold.  Once Dad died Massachusetts came looking to be reimbursed but for only half of what Dad should have netted from the house sale, which means Noah can keep the rest.  He also received what is the equivalent of an interest free loan, since the State is not charging him interest on the money it paid out in benefits.

With all the improvements he made, Noah told me the home is now worth probably $600,000 or more.  If he doesn’t have the cash to pay the State, he can take a mortgage on the home.  And again, he is still $150,000 ahead.

I knew it would take time for it to sink in but I told Noah he was lucky.  What it did end up to be the best move from a Medicaid standpoint.  He just didn’t know it at the time.  Noah’s story is a cautionary tale.  He went through the Medicaid system blindly and, albeit, with a repayment of $150,000 to Medicaid, it turned out OK.  It certainly could have been a lot worse.

Keep in mind that each situation is different.   What was the right move for Noah and his Dad may not be the right one for the next person.  Each situation has its unique set of facts and circumstances and is why I always tell people there is too much at stake to try this on your own.

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

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

Tags: Medicaid, MassHealth, Massachusetts, Medicaid penalties, 2014

What To Do When Medicaid Comes For You

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Fri, Apr 04, 2014

Medicaid, estate planning

Noah called us because he received a letter from Medicaid looking for money.  Dad had been on Medicaid for 3 years before he passed away.  Massachusetts was looking to recoup benefits it paid out on Dad’s behalf to the tune of approximately $150,000.

                Noah received what is called an estate recovery letter.  The State of Massachusetts looks to recover as much of its money as it can from the estates of Medicaid recipients when they die.  “But, why would there be anything left when Dad died,” you might ask, since he had to spend down to less than $2000 in assets before qualifying in the first place.  Good question.

Well, you see, the problem goes back about 4 years.  Noah told me that his dad was living in his home until his health declined to the point where he needed to be placed in a nursing home.  Since Dad had only the house to his name and no other assets, Noah paid some of Dad’s care costs before and after he moved to the nursing home, about $100,000 total.  He then put the house up for sale and applied for Medicaid.

                Massachusetts Medicaid will approve the application while you are trying to sell the home – as long as all the other Medicaid requirements are met.  And that is just what happened in the case of Noah’s dad.  But then the story takes a bit of a twist.

                After some time on the market without an offer, Noah decided to buy the home himself.   It needed a lot of work and upgrades so he and his wife and kids could move in.  He purchased the home for $400,000 and spent $300,000 in repairs and upgrades.  At the closing he reimbursed to himself the $100,000 he spent on Dad’s care from his own funds.  But, he also reduced the purchase price by $300,000.  In other words, Dad actually paid the costs of the repairs and upgrades and received no cash in the transaction.

                That was the root of the problem with Medicaid.  Dad actually made a gift of equity in the home to Noah, which would of course be subject to a Medicaid penalty.  But, why did Dad remain on Medicaid for 3 years?  Didn’t that mean everything was still OK? And how much does Noah actually have to pay back?  We will cover that next time.

 

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

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

Tags: Estate Planning, Medicaid, MassHealth, Medicaid penalties, 2014

Tax Fraud, Medicaid Penalty, or Both? Part 2 | Massachusetts Estate Planning Attorney

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Thu, Jan 30, 2014

 

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Last time we were discussing Ed’s problem.  His brother Tom had been using Dad’s account to buy and sell Tom’s investments, presumably because having Dad pay the tax instead of Tom was more beneficial.  However, what happens when Dad applies for Medicaid?

Medicaid will definitely question the $500,000 in assets transferred back from Dad to Tom.  As long as Tom can show that he originally transferred the assets to Dad, then the transfer back is simply Tom taking his money back.  Ed, however, told me of Tom’s reluctance to cooperate, for obvious reasons.

I explained that while I cannot guarantee that the IRS or State Division of Taxation won’t catch on, it is highly unlikely.  I don’t know of any instance in which Medicaid has reported what it sees on a Medicaid application to the IRS or Massachusetts’ income tax division.  Government bureaucracies don’t communicate well with each other.  And certainly there is even less communication between federal and state government.  So, I think it is very unlikely that Tom will run into problems because of what is disclosed as part of a Medicaid application.

Still, that may not be enough to secure Tom’s cooperation.  But, I told Ed that his calling me now, while Dad still has significant assets, was a good thing.  Knowing the potential problems that lie ahead, we can work around them.

Ed told me that Dad receives $2250 from Social Security and a pension and that he is a Korean War Veteran.  That’s good.  Moving Dad’s assets into a VA qualifying trust, we can get him a VA Aid and Attendance pension of  $1753 per month if he moves to an assisted living facility.  At $4000 per month his income would entirely cover the $4000 monthly cost of care that Ed had estimated.

It is very likely, however, that as Dad’s health declines he’ll need increased care so that $4000 number will climb.  Our goal is to stretch his dollars so that he does not need Medicaid until 5 years after Tom took his $500,000 back.  Why?  Because then we won’t have to explain it all to Medicaid since it will fall outside the 5 year look back.

Doing the math, I showed Ed how that was very doable.  Tom took back his money 6 months ago.  So we really have to get through the next 4 and ½ years, 54 months.  If over that 54 month period Dad’s care averages $6000 per month, he’ll need an additional $2000 above what his income can cover.   That money would come from the money we transferred to the trust, approximately $108,000 in total.  Once we’re past the 5 years we don’t have to worry about the mess Tom created.

But what if Dad’s health deteriorates more rapidly and he needs nursing home care at $10,000 per month after, say, 6 months.  Well, that means the shortfall over 4.5 years would be about $300,000 and Dad would have just enough to get through till Medicaid kicks in.

I explained to Ed that these were all estimates but the point I was making, which he clearly understood, is that we need to manage Dad’s care and costs with an eye towards Medicaid down the road.  Of course, we don’t know what scenario will actually occur, but following my plan he’ll be ready for whatever the future throws at him.  And we won’t have to worry about getting Tom to cooperate to fix the mess he created.

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

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

Tags: IRS, Medicaid, MassHealth, medicaid qualification, Medicaid penalties, 2014

Medicaid is No Walk in the Park Part 2|Massachusetts Elder Law Attorney

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, Nov 20, 2013

Medicaid is No Walk in the Park 

Part II

Walk in the Park

 Last time we were examining Kate’s problem getting Medicaid for her mom.  Specifically, the issue was a joint account held by mother and daughter.

Into that account, Kate deposited her income which she used to pay for household bills, such as utilities, real estate taxes, homeowner’s insurance etc.  She took some of Mom’s income and transferred it to that joint account in order to pay some of those bills.  She explained that both of them were living in the household so they both contributed to the costs.

“Not a problem”, I told Kate.  “But, if you are claiming that the account isn’t Mom’s, you have the burden of proving that.  Medicaid assumes that it was Mom’s account and she put your name on it, not the other way around.  You must trace that account back to when it was just in your name, before you added Mom as a co-owner.  Only then will Medicaid be satisfied that it isn’t Mom’s.”

Kate listened carefully.  “So, is that it”, she asked.   No, actually there was more.

If we are successful in showing Medicaid that it isn’t Mom’s account, then the transfer of Mom’s income to that account to help pay the bills would now be a transfer for less than fair value.  Why is that?  Because Mom is transferring money out of her name to an account that we have just proved is Kate’s, not Mom’s.

Isn‘t  Kate then caught up in a classic Catch-22?  She seems to lose either way. Well, no.  Not really.  There is a way out.  Remember, the money transferred to the joint account is Mom’s share of the household expenses.  As long as we are able to prove by a clear paper trail what that money was spent on, then Medicaid won’t assess a penalty.

I asked Kate if she is able to do all that.  She was hesitant to reply.  She told me she hadn’t kept detailed records with the expectation that she would need to prove all this to anyone.  But, she said she would do her best.

“As long as we can back up what you are saying with a clean paper trail”, I told Kate, “then we should be able to straighten out your Medicaid denial.”  Kate certainly had plenty of motivation to get to work.  The$ 40,000 nursing home bill that Mom owes would motivate just about anyone.

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

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

Tags: asset protection, Medicaid, MassHealth, medicaid qualification, assets, Medicaid penalties, asset, 2013

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

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