K. Gabriel Heiser
Attorney, author, Medicaid asset protection planning
K. Gabriel Heiser, J.D., is an attorney with over 25 years of experience in elder law and estate planning. He is the author of "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets," an annually updated practical guide for the layperson.
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Question
Is there a 5 year look back on stocks?
A spouse in the community (where the other spouse is in a nursing home) is entitled to retain one half of all the assets of both spouses,... A spouse in the community (where the other spouse is in a nursing home) is entitled to retain one half of all the assets of both spouses, up to a maximum of $115,920. In some states the community spouse is entitled to keep the first $115,920 without dividing in two. So, depending on your state and the value of the stocks, you may be able to retain all of the stocks and still have your husband qualify for Medicaid.
As for the "five-year rule," that does not apply to transfers between spouses. For transfers from you or your husband to someone else, however, that rule states that all gift transfers made by either of you within five years of applying for Medicaid will result in a disqualification ("penalty") period: the more that is transferred, the longer the penalty period. The exact penalty period is calculated differently state-by-state. see more
As for the "five-year rule," that does not apply to transfers between spouses. For transfers from you or your husband to someone else, however, that rule states that all gift transfers made by either of you within five years of applying for Medicaid will result in a disqualification ("penalty") period: the more that is transferred, the longer the penalty period. The exact penalty period is calculated differently state-by-state. see more
Question
Is income producing property an exempt asset in Medicaid planning?
In some states all income-producing property is exempt (although the income generated by that property will itself be countable). This is... In some states all income-producing property is exempt (although the income generated by that property will itself be countable). This is an example of why it is important to check out the rules in your own state. Note that even if the income-producing property is exempt and the owner successfully qualifies for Medicaid, the property will still be subject to estate recovery (recoupment) by the state following the death of the property owner/Medicaid recipient. So without careful planning, possibly all this will accomplish is a delay in paying for Medicaid! see more
Question
What do I do if Medicaid won't cover my mom in a nursing home and I can't pay the bill?
Typically the nursing home will absorb the bill (minus the Social Security contribution of the patient) while the initial Medicaid... Typically the nursing home will absorb the bill (minus the Social Security contribution of the patient) while the initial Medicaid application is pending. They won't evict the patient for non-payment. see more
Question
How much money can Mom gift me without raising red flags with Medicaid?
Regarding so-called "filial responsibility" laws, i.e., forcing the kids to pay for a parent's nursing home bills if the... Regarding so-called "filial responsibility" laws, i.e., forcing the kids to pay for a parent's nursing home bills if the parent is broke, here's a nice chart showing the various states that have filial responsibility laws:
http://tinyurl.com/8b89b9d
Clicking each state will bring up a description and citation of that state’s law. see more
http://tinyurl.com/8b89b9d
Clicking each state will bring up a description and citation of that state’s law. see more
Question
How much money can Mom gift me without raising red flags with Medicaid?
Medicaid only looks for uncompensated transfers (i.e., gifts) made within the five-year period prior to applying for Medicaid. If the... Medicaid only looks for uncompensated transfers (i.e., gifts) made within the five-year period prior to applying for Medicaid. If the applicant wants to blow money on trips and gambling, those are for the applicant's own benefit and not a gift, so does not affect Medicaid eligibility.
Indeed, virtually all other government needs-based programs simply look at the assets the person has currently and don't even go back to look for gifts, like Medicaid does. The government can't get into forcing people to live one kind of life over another, perhaps much to the chagrin of the hard-working and frugal neighbor who saves and then pays for his own medical care or nursing home care who looks across the street to see his profligate neighbor who never saved and/or gambled his money away over a lifetime, and now seeks government benefits of various kinds.
What alternative is there? see more
Indeed, virtually all other government needs-based programs simply look at the assets the person has currently and don't even go back to look for gifts, like Medicaid does. The government can't get into forcing people to live one kind of life over another, perhaps much to the chagrin of the hard-working and frugal neighbor who saves and then pays for his own medical care or nursing home care who looks across the street to see his profligate neighbor who never saved and/or gambled his money away over a lifetime, and now seeks government benefits of various kinds.
What alternative is there? see more
Question
Mom and I sold the house. Money was to pay me back for all care and expenses over the years. Do I need to pay...
Normally when a child assists a parent (or anyone, for that matter) and receives money in exchange for that work, it would be counted as... Normally when a child assists a parent (or anyone, for that matter) and receives money in exchange for that work, it would be counted as taxable income that must be reported on the child's income tax return. However, if there was no pre-arranged agreement to be reimbursed, and no legal obligation of the parent to re-pay the child's efforts via money, then you'd have an argument that the money was indeed a gift and not taxable income. However, to protect yourself against the IRS, you'd be well advised to consult a CPA and have a letter in your file if he or she agrees with this analysis! As you can see, the result varies with the facts, so only a complete review of your particular situation by a CPA would be reliable, here. see more
Question
Can Medicaid take your parent's home to pay for nursing care if the caregiver is joint owner?
The nursing home would not receive a your mother's portion of the sales proceeds (presumably half), however that money would cause your... The nursing home would not receive a your mother's portion of the sales proceeds (presumably half), however that money would cause your mother-in-law to be disqualified from Medicaid because of excess assets (i.e., she can only have up to $2,000 in countable assets). Those assets would also form part of her estate, so even if she died the next day, the state could still file its claim for reimbursement (for Medicaid expenditures) against that money. One option is for his mother to transfer the house or money and become disqualified from Medicaid; upon her death, however, the state would not be able to attach that money. This should only be attempted with advice of a local elder law attorney, however! If she is unable to make a gift (because of her mental condition) and her power of attorney (if any) does not permit such gifting, then of course that option is not available. see more
Question
How much money can Mom gift me without raising red flags with Medicaid?
Regarding terrim's comment: The "lookback period" is limited to 5 years prior to the date the individual applies for... Regarding terrim's comment: The "lookback period" is limited to 5 years prior to the date the individual applies for Medicaid. Any transactions outside of that period may not be considered by the state when a person applies for Medicaid. Also note that in some states income-producing property--of any value--is exempt for Medicaid purposes. see more
Question
How much money can Mom gift me without raising red flags with Medicaid?
Regarding the comment by sirpsychosexy, below: It's true that the state government workers do not follow the senior around to verify... Regarding the comment by sirpsychosexy, below: It's true that the state government workers do not follow the senior around to verify what they tell them. The same is true when you file your tax return, if you are in a cash business. However, when you sign the tax return (or Medicaid application) you are obligated to report accurately, completely, and truthfully what actually happened. To do otherwise invites a charge of fraud, which incurs both jail time and fines. In situations other than gambling, the state Medicaid department will ask to see receipts for purchases or other documentation to prove that the funds were spent on something and not gifted to a family member. see more
Question
How much money can Mom gift me without raising red flags with Medicaid?
Unfortunately, there is no minimum amount that can be gifted to avoid the Medicaid penalty. All gifts made within the five-year period... Unfortunately, there is no minimum amount that can be gifted to avoid the Medicaid penalty. All gifts made within the five-year period immediately prior to the date your mother applies for Medicaid are added together to figure out her penalty period. The penalty is equal to the total amount gifted divided by your state's average monthly nursing home cost (set by each state annually); that figure is the number of months that Medicaid will not pay for your mother's care (i.e., the penalty period).
The two-year rule you refer to requires that you provide such care for your mother that BUT FOR SUCH CARE she would have needed to move into a nursing home, and such care is provided for at least the two-year period immediately preceding the date your mother eventually enters a nursing home. If you can document that, then your mother can then transfer the home to you without it causing a Medicaid penalty. You should be sure to get a physician's statement to back this up. You must live in the same unit as your mother, not just in a different unit in the same multi-family dwelling.
Others have suggested you have an attorney draw up a Personal Care Agreement, which will permit your mother to transfer money to you in exchange for your care for her. That's a good idea; but remember that those amounts she pays you must be reported as taxable income, on your income tax return. see more
The two-year rule you refer to requires that you provide such care for your mother that BUT FOR SUCH CARE she would have needed to move into a nursing home, and such care is provided for at least the two-year period immediately preceding the date your mother eventually enters a nursing home. If you can document that, then your mother can then transfer the home to you without it causing a Medicaid penalty. You should be sure to get a physician's statement to back this up. You must live in the same unit as your mother, not just in a different unit in the same multi-family dwelling.
Others have suggested you have an attorney draw up a Personal Care Agreement, which will permit your mother to transfer money to you in exchange for your care for her. That's a good idea; but remember that those amounts she pays you must be reported as taxable income, on your income tax return. see more
Question
If my name is on mom's checking account is her money safe from the courts after she dies?
I assume estate taxes are not an issue, since that only affects those with more than $5 million in assets. Gift taxes similarly. Thus, I... I assume estate taxes are not an issue, since that only affects those with more than $5 million in assets. Gift taxes similarly. Thus, I wouldn't worry about gift or estate tax issues related to joint accounts, though amitebird is technically correct.
I think you're most concerned that you can have access to the funds immediately following your mother's death, and a joint account will allow you to do just that. Note, however, that her will only covers accounts in her her sole name, e.g., not joint accounts. So if her will says "All my assets go equally to my children," and you are the only one on the bank account with her, then the money in the joint bank account will pass to you alone and not to your siblings. If this is what your mother intends, that's fine. If not, it could cause family disputes.
As for whether the creditors of your mother can reach the joint bank account after her death, note that this varies from state to state. In many states, the creditors are simply out of luck and cannot attach the account of a deceased joint owner. see more
I think you're most concerned that you can have access to the funds immediately following your mother's death, and a joint account will allow you to do just that. Note, however, that her will only covers accounts in her her sole name, e.g., not joint accounts. So if her will says "All my assets go equally to my children," and you are the only one on the bank account with her, then the money in the joint bank account will pass to you alone and not to your siblings. If this is what your mother intends, that's fine. If not, it could cause family disputes.
As for whether the creditors of your mother can reach the joint bank account after her death, note that this varies from state to state. In many states, the creditors are simply out of luck and cannot attach the account of a deceased joint owner. see more
Question
How do I handle creditors now that mom has been admitted to a dementia care center?
Since your mother has no assets, it is only the income that is an issue. Does it belong to the past debtors or to the nursing home? In... Since your mother has no assets, it is only the income that is an issue. Does it belong to the past debtors or to the nursing home? In either case, once the dust settles, it will not be "available" to your mother, and thus will not affect her Medicaid coverage.
The website of the FTC (Federal Trad Commission) notes the following: "The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.
Under the FDCPA, a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy delinquent debts and then try to collect them."
You may want to read the rest of their advice, here:
http://www.consumer.ftc.gov/articles/0149-debt-collection
It's important to avoid a lawsuit, since even if you are in the right, you could wind up having to hire a lawyer at great expense just to defend yourself. Thus, I suggest you contact the debtor organization to explain the situation and try to work it out. see more
The website of the FTC (Federal Trad Commission) notes the following: "The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.
Under the FDCPA, a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy delinquent debts and then try to collect them."
You may want to read the rest of their advice, here:
http://www.consumer.ftc.gov/articles/0149-debt-collection
It's important to avoid a lawsuit, since even if you are in the right, you could wind up having to hire a lawyer at great expense just to defend yourself. Thus, I suggest you contact the debtor organization to explain the situation and try to work it out. see more
Question
Will Medicaid pay for bills from hospital, ambulance, etc. prior to the application?
Yes, good idea to check for 3 mos retroactive coverage. Most states do indeed allow for that.
Question
Will Medicaid pay for bills from hospital, ambulance, etc. prior to the application?
Here's the NY State rule, which I believe applies to other states, as well: Past Unpaid Medical Bills Past unpaid medical bills may be... Here's the NY State rule, which I believe applies to other states, as well:
Past Unpaid Medical Bills
Past unpaid medical bills may be used to meet your excess income amount even if they are old, as long as they are still viable, meaning that the medical provider is still able to bring a legal action to collect them. These bills may be applied to meet your excess income indefinitely into the future.
Example: You have a hospital bill from four years ago and received a collection notice from the hospital this year. The bill is for $2,000. Your excess income is $200. You may submit this bill to meet your excess income for six consecutive months. After the six months is over, if the provider is still trying to collect on the bill, you can continue to use the balance of the bill for four more consecutive months. see more
Past Unpaid Medical Bills
Past unpaid medical bills may be used to meet your excess income amount even if they are old, as long as they are still viable, meaning that the medical provider is still able to bring a legal action to collect them. These bills may be applied to meet your excess income indefinitely into the future.
Example: You have a hospital bill from four years ago and received a collection notice from the hospital this year. The bill is for $2,000. Your excess income is $200. You may submit this bill to meet your excess income for six consecutive months. After the six months is over, if the provider is still trying to collect on the bill, you can continue to use the balance of the bill for four more consecutive months. see more
Question
Will Medicaid pay for bills from hospital, ambulance, etc. prior to the application?
Medicaid won't pay those bills directly, but the Medicaid recipient will be able to deduct the bills from their monthly income. Medical... Medicaid won't pay those bills directly, but the Medicaid recipient will be able to deduct the bills from their monthly income. Medical and remedial care expenses that are not subject to being repaid by an outside organization (such as a health insurance program) may also be deducted from the nursing home resident’s income before paying the balance to the nursing home each month. see more
Question
Selling mom's home for Medicaid. How low of an offer may we accept?
As long as the home is sold to a legitimate third-party buyer (i.e., not a relative or friend of the seller), the sale will be deemed fair... As long as the home is sold to a legitimate third-party buyer (i.e., not a relative or friend of the seller), the sale will be deemed fair and acceptable to the Medicaid authorities. see more
Question
Will declaring my mother as my dependent affect her California Medicaid benefits?
Medicaid eligibility rules do not count a child's income when evaluating eligibility of the parent. Thus, if in fact you have paid for... Medicaid eligibility rules do not count a child's income when evaluating eligibility of the parent. Thus, if in fact you have paid for support of your mother, and are able to take her as a tax deduction as a dependent, that is an IRS rule and is separate from the Medicaid rules. You can research this by looking for "child-to-parent deeming Medicaid" for your state. You will find that in determining Medicaid eligibility of a child under 18, indeed this IS deeming from the parent to the child, but it's never the other direction. see more
Question
If a grantor signs a quit claim deed making the property into a living trust, can the grantor change to whom s...
A discussion of living trusts and Medicaid should have its own topic. Can you repost your question as a new topic? Thanks.
Question
My dad has VA Aid and Attendance. Can he apply for Medicaid to cover the cost of rehab?
Typically Medicare--not Medicaid--would cover the rehab costs. In any event, it is possible for a person to have both Medicaid AND VA Aid... Typically Medicare--not Medicaid--would cover the rehab costs. In any event, it is possible for a person to have both Medicaid AND VA Aid & Attendance benefits. Since Medicaid covers more of the expenses, it may make sense to pursue his eligibility for Medicaid. In some cases, the A & A payments will be reduced significantly once the individual is qualified for Medicaid. see more
Does anyone know the legalities of notarizing documents?