Massachusetts Estate Planning & Asset Protection Blog

The child caregiver exception to MassHealth transfer rules is one that many people focus on in an effort to protect the home and transfer it from parent to child.  It is also one that MassHealth scrutinizes very closely.  Massachusetts has rejected this exception where the child had a full time job and was therefore unavailable to assist the parent most of the day.  The care provided by the child must be such that if he/she was not providing it the parent would have needed nursing home level care.  Leaving the parent unattended for long stretches of the day while the child is working suggests that a 24/7 level of care is not necessary and so would not count towards the 2 year requirement.

Another issue is documentation of the need for care.  Typically, the child will come upon this exception as a solution in retrospect. MassHealth will require some verifiable proof that Mom needed nursing home level care at the beginning of the 2 year time frame.  We tell our elder law clients the best way to do that is with a doctor’s examination and documentation for that purpose.

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. 

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

What Transfers Does Massachusetts Consider To Be Exempt from MassHealth Transfer Penalty Rules? (Part 2)

Yesterday we talked about the transfers of the home that are exempt from Massachusetts’s MassHealth penalty but what about assets other than the home?  The following transfers are also exempt:

1.            Assets transferred to the spouse or for the benefit of the spouse as long as the spouse didn’t then transfer them to someone else.  To be for “the sole benefit of”, the funds must be transferred to a legally binding trust created by a document providing that the funds are solely for the benefit of the spouse.

2.            Assets transferred to the MassHealth applicant’s child who is blind or permanently and totally. A determination of disability by Social Security will satisfy this requirement. This transfer can be outright to the child or to a trust.  The trust must provide that the funds be distributed to the disabled individual on an actuarial sound basis over his/her lifetime.

Click here to get a free sneak preview of the “Senior and Boomer’s Guide to Health Care Reform & Avoiding Nursing Home Poverty”, which contains information on how Massachusetts Seniors and Boomers will be impacted 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.

What Transfers Does Massachusetts Consider To Be Exempt from MassHealth Transfer Penalty Rules? (Part 1)

Not all transfers are subject to a transfer penalty.  The home in many ways gets special status, including when it comes to transfer rules.  The following transfer of the applicant’s home is exempt if made to:

• The MassHealth applicant’s spouse

• A child of the MassHealth applicant under age 21 or blind or totally and permanently disabled.

• A sibling of the MassHealth applicant who had an equity interest in the home before the transfer and was living there for at least one year before institutionalization.

• A child of the MassHealth applicant who resided in the home for at least 2 years immediately before the applicant went to the nursing home and who provided care such that if it had not been provided the applicant would have needed nursing home care.  The care must be that which requires “special attention”, rather than personal support activities and “must have been essential to the health and safety of the individual and consisted of activities such as, but not limited to, supervision of medication, monitoring of nutritional status, and insuring the safety of the individual.”   The State scrutinizes this exception closely.  Proof of the child’s residence in the home by tax return, official mail going there is needed.  Also, a certification from a medical professional as to the care needed over the 2 year period is also a requirement as well as the actual care provided by the child.

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.

To gain free online access to the Complete Alzheimer's Resource Kit, which contains care tips as well as other useful information on Alzheimer’s disease, please visit www.BostonMemoryLawyer.com. 

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.

Earlier this week I was telling you about Ron.  His Dad transferred his home to Ron, who currently is disabled but was not at the time of the transfer.   I explained to Ron that the transfer, contrary to what he believed, is subject to a Medicaid transfer penalty of 51.5 months if Dad applies for Medicaid now.  I had an idea of how we could fix it.

But, before I shared that with him I asked Ron a few more questions.  “Who has been paying the taxes and upkeep on the home?”, I inquired.  Ron told me that until he moved into the home a year ago, Dad was paying all those expenses.  He transferred money to Ron who then paid those expenses out of his own checking account.

Again, I told Ron that up until the point in time that he was deemed disabled by Social Security, those transfers would be subject to a Medicaid transfer penalty.  So, adding those amounts to the $400,000 home transfer would increase the penalty further.

Ron was really panicking now.  I told him to hold on.  I had a solution.  “What we need to do is have you transfer these assets back to Dad now, including the home.  We could then have Dad transfer the assets right back to you”, I told him.

I know you are reading this and saying to yourself, “that can’t be right”.  However, the transfer back to Dad will undo the potential transfer penalty.  And then the new transfers from Dad to Ron will fall within the disabled individual exception.  It is critical that this all be done, however, before filing a Medicaid application.

Ron was confused and amazed at the same time.  He understood what I was saying although it seemed crazy to him.  But, that’s how the Medicaid rules are, complex and bizarre at times.  Had Ron not called us when he did to hire us to handle Dad’s Medicaid application, he would, in all likelihood, have been faced with a lengthy penalty with no idea of how to fix it.  And because it can take 4 to 6 months after the initial interview before the State actually reviews your application, Ron would not have learned of his mistake until he ran up tens of thousands of dollars of nursing home bills. 

No one wants to be in that type of a mess.  Ron was lucky he got the right advice at the right moment from someone who knows the complexities of the Medicaid rules.  As they say, timing is everything.

To gain free online access to the Complete Alzheimer's Resource Kit, which contains care tips as well as other useful information on Alzheimer’s disease, please visit www.BostonMemoryLawyer.com. 

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

The last 2 weeks we were discussing the transfer of a home to a child who has been living with the parent in that home.  But, what about transferring the home to a disabled child?  Isn’t that an exception to the Medicaid transfer rules?

The answer is yes, but like all things Medicaid related, it is tricky.  A few weeks ago Ron called me with regard to his dad who needs nursing home care and will run out of funds to pay for it in 2 months.  Ron will need Medicaid for Dad.  He told me that 4 years ago Dad transferred his home to Ron.  I told Ron that this is a transfer subject to a Medicaid penalty unless Ron is blind or permanently and totally disabled. 

“No problem”, Ron said.  “I am disabled.”  Well, not so fast.  I explained to Ron that the disability determination must be made either by the Social Security Administration or the Disability Review Unit of the State of New Jersey’s Division of Medical Assistance and Health Services.  Ron told me he receives Social Security Disability payments.  I then asked him how long he has been on SSD.  His answer was about 2 years.  “That’s a problem”, I said.

I asked Ron to go back through his records and provide me with a copy of his approval letter from Social Security.  Sure enough, when he faxed that letter to me I saw that he was deemed disabled a full year after Dad transferred the house to Ron.  “Does that matter”, he asked.  Absolutely.  In order for the transfer to fall within the disabled child exception, Ron must have been disabled at the time of the transfer.

Ron told me the house is worth approximately $400,000.  At that value, the transfer penalty is 51.5 months, meaning Ron would have to pay for Dad’s care for that long before Medicaid will cover him.  So is that it?  Must Ron sell the home that he now lives in and spend down those assets?  Maybe not.  Later this week I will reveal what I told Ron.

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.

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. 

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.

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.

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.