Q: Mother was taking care of grandmother. Mother then dies. Grandson steps in to take care of grandmother. Together they get a Quit Claim Deed. Grandmother gets injury to foot. The doctor advises ER visit. Grandmother kept 3 days then moved to nursing facility for “rehabilitation”. The nursing facility moves grandmother into extended stay. Medicaid takes over after 3months. Medicaid put lien on house approximately 4 months later. Quit Claim Deed was already in place but not recorded yet. (West Mifflin, PA)
A: Medicaid can look back for a period of five years at all transfers of real and personal property by a Medicaid applicant. If the transfer was done without fair consideration, for example, by gift, the transferred property can be considered part of the applicant’s estate. If so, Medicaid can exclude the applicant from funding to the extent of the value of the property. This is what sounds like happened here. It would be worth your while to have the case reviewed by an attorney versed in Medicaid regulations. There may be an exception if a disabled child was living the home or a child serving as a caretaker of the applicant lived in the home for a two-year period prior to hospitalization. In addition, there are permissible exclusions in the spend down process that you may want to be advised on.
Q: My grandfather is unresponsive in a long term rehab center. He is 65 (December Birthday), has Medicare and Bankers Life/Colonial Penn Plan N. He is about to run out of covered days. The thought was to put him on Medicaid, but we don’t know what they can take (home, savings, property, cars, etc.), what the widower is entitled to keep, and so on. We also don’t know how it will work with Social Security – will she be able to keep his monthly check? Together last year they made a total of a little less than $40,000. Everything they own, their house (no mortgage), 3 cars, and all bank accounts are in both their names. The other problem is that my grandmother doesn’t have power of attorney, and since my grandfather is unresponsive, that isn’t possible (to my knowledge). What about guardianship? (Forest Hills, PA)
A: You really need to find an elder lawyer versed in Medicaid regulations to guide you through your situation. Generally, the state takes a snap shot of the assets a married couple owns at the time of eligibility for Medicaid. It doesn’t matter if the accounts are titled jointly or in either spouse’s name. There are certain assets that will be excluded such as the primary residence, one car, certain life insurance and qualified retirement accounts of the community spouse (the spouse not in the hospital). This snapshot value is added together — the community spouse gets to keep at a certain amount of assets pursuant to Medicaid’s convoluted formula. Sometimes, you can increase the maximum amount that can be retained if. Again, you really need a thorough assessment of the situation. If grandfather is not competent to sign a Power of Attorney, you may need to have an attorney file for a guardianship over him.
Q: How much can an independent senior (84 years old) gift money without getting penalized if admitted to a nursing home shortly after? How much money can be gifted to children each without penalization? How much money may be gifted to grandchildren?
A: The Federal Gift Tax Exclusion allows you to give $14,000 in cash or other assets each year to each of as many individuals as you want without dipping into the basic exclusion. However, if grandmother may need to apply for Medicaid funding in order to afford her nursing care in the next five years, these gifts may not be advisable. Medicaid eligibility rules have a five year look back on all such gifts or transfers made without consideration. Therefore, any gift made in the previous five (5) years of the Medicaid application and eligibility, can result in her being ineligible, or her being excluded from funding to the extent of the dollar amount of monetary gifts made without consideration. If you believe that Medicaid may be in her future, it would be wise to have grandmother consult with a lawyer versed in Medicaid law, now. There are ways of excluding some of her estate from a Medicaid claim. There are exclusions and exceptions, trusts can be created and there are allowable purchases that can be made in the Medicaid spend down process.