Q: If my parents sell their home to their children within the 5 years? How does the 5-year issue work in Pennsylvania? (Munhall, PA)
A: PA manages its Medicaid program through the PA Department of Human Services. Under Medicaid regulations, any transfer of an asset by a Medicaid applicant for no consideration (i.e., gift, $1.00, under market value, etc.) within 5 years preceding a Medicaid application, can cause the applicant to be ineligible for Medicaid benefits to the extent of the fair market value of the asset transferred. You say your parents sold the home. If it was a legitimate sale for fair market value, it would not rule your parent’s ineligible. If the proceeds of the sale went to your parents for their living expenses, which should be easily documented, there should be no problem. I suggest consulting with an attorney to review this sale before you do it.
Q: My mother has Alzheimer’s and we are looking into placing her into an assisted living facility which deals with her specific needs. If me and my siblings self pay with no charge to her insurance, is the facility entitled to their savings account and or home? (Munhall, PA)
A: I believe your question is whether or not Medicaid potentially has an interest in your parent’s bank accounts or home. The assisted living facility does not care who pays the bill, as long as it is paid. If the bill cannot be paid due to the exhaustion of funds, the facility will advise the next of kin to apply for Medicaid. Once the Medicaid application begins, Medicaid will require the next of kin to report all of mother’s assets. In simple terms, since Medicaid is potentially paying for your mother’s nursing care for the remainder of her life, they expect a contribution of the value of her personal assets. Medicaid looks at all transfer of an applicant’s assets within the five years preceding the application done for less than fair compensation. This normally include gifts to family. Any asset so gifted, can penalize her from Medicaid coverage to the extent of the value of the asset transferred. Since you can afford private pay now, you have some time to prepare for the future when mother’s costs may grow significantly, and you therefore should meet with an attorney.
Q: Elderly mother has been in nursing home for 2 years. She has used ALL her life savings to pay for it and is now out of money. She receives Medicare but not Medicaid, yet. She owns a very small home that was her marital home (husband is now deceased). She did own family farm that included old family home and acreage but transferred that to her children in 2016. If she applies for Medicaid, can they seize the family farm property to recover benefits paid for nursing home? (Delmont, PA)
A: The Department of Human Services of PA examines all transfers of property done for no consideration or for less than market value by an applicant in the 5-year period preceding the application. If the transfer of the farm to family was a gift, this could subject her to a penalty and consequently delay her ability to receive Medicaid. This are of law is very complicated. You should seek an opinion from an attorney who is versed in Medicaid regulations. He or she will need to know more facts than you have given us here to properly assess your situation.
Q: We built an in-law apartment onto our home with proceeds from the sale of their home. If they need to be moved into a nursing home before five (5) years have passed, will they or us need to come up with the full amount of money generated from the sale of their house, necessitating the sale of our home to recoup the $53,000 spent on their apartment, before Medicaid will pay the rest of the expenses? Or does Medicaid accept/require the remaining monies only? (Pittsburgh, PA)
A: You need to consult with an attorney who is versed in Medicaid regulations. Generally, the idea is that any transfer of wealth, without fair consideration (like gifts) within five years of the Medicaid application, can render the Medicaid applicant ineligible for Medicaid funding to the extent of the value of the transfer. It is not the nursing home that triggers the 5-year look back but the Medicaid application. If you are saying that they liquidated their home, to pay for an addition to your home so they can live in it under your care, I am not sure the entire value of the addition is a gift as they are receiving consideration in the form of housing and care. An attorney can also advise you on a caretaker contract which may help you shelter some of the in-law’s estate.
Q: My spouse and I have lived on family land that is owned by my parents for 26 plus years. We pay our own property tax however it is on family land that has never been deeded over to us. We were told 26 years ago that the land would be divided between us siblings. My family is the only one who lives on the land. My dad is now disabled and uses a walker and my mom is not able to take care of him and is in very bad health. He is looking at going into the nursing home. We are worried about what will happen to us since we live on the land that isn’t deeded to us. Do we have any rights after living here for so long? (Pittsburgh, PA)
A: The only way for you and your husband to get ownership of this property is to have your parents deed it to you now, or pass it to you through their wills. With either method, they need to be competent to do so. If they are presently competent, they should do this now before their health declines, if it is what they want to do. However, this decision must be made with full knowledge of Medicaid implications. If either parent should need to apply for Medicaid funding all transfers of property within the preceding five years are scrutinized. If property is gifted or sold for less than market value (gifts to family) it could subject them to a Medicaid penalty. Therefore, only do this type of estate planning under the advice of an attorney versed in Medicaid regulations.
Q: How can my friend gift away money to his nieces and nephews and avoid a penalty from Medicaid? (Pittsburgh, PA)
A: No one can answer this question without knowing all the facts surrounding the potential applicant including but not limited to age health, assets and how they are titled, health insurance resources, etc. You need to consult with an attorney versed in Medicaid regulations. I think you may be confusing “unlimited gifts” with the Federal Gift tax exemption, which has nothing to do with Medicaid. The basic idea is that all transfers for less than fair market consideration (deal and gifts to relatives) within the five-year period prior to a Medicaid application for benefits, and render the applicant ineligible for Medicaid benefits to the extent of the value of assets transferred. An attorney experienced with regulations of Pennsylvania’s Department of Human Service’s administration of the Federal Medicaid program, can guide you and advise if any and what exemptions may be available to your applicant.
Q: Our mother is going into a nursing home and application asks for any transfers. Do we need to declare gifts from 2-3 yrs ago? She has resources for approximately one month in a Nursing home and afterwards I believe Medicaid would take over.
A: Yes, when applying for Medicaid eligibility, you need to list all transfers of any property for no consideration (gifts or under market value) in which mom had an interest for the past 5 years. Any transfers without consideration, or which the consideration (money received for sale) for her property which has not been documented, could possibly exclude her from Medicaid eligibility. You really should consult with an estate lawyer or elder law lawyer versed in Medicaid law before filling out any benefits application.
Q: Pa and NJ nursing home 5 year look back. My wife and I each received $10,000 from her cousin in February of 2010. Can nursing take money back? We reside in NJ and PA. Wife’s cousin will have to go into nursing home prior to the 5 years in February 2015. The cousin currently receives PA Medicaid for health coverage. Will the nursing home make us give the money back? (which has been spent) Will there be a penalty term?
A: There is some confusion in your question so I strongly urge you to sit down with an attorney with all of your information. Simply put, a nursing home cannot make a donee who did nothing wrong return a gift. However, most gifts within the look back period trigger Medicaid penalties. It would be well worth an elder law attorney consult to determine gift ramifications and Medicaid planning options. It is the Medicaid look back, which is 5 years back from the date of eligibility, which matters. The transfer may be questioned. If you are alleging it was payment for caretaker services, you better have such services documented.
Q: I’ve been told the rules differ from state to state. The surviving parent lives in Massachusetts. We live in Pittsburgh. If property is transferred to an adult child more than 5 years before the parent requires Medicaid assistance, how is the look-back rule handled?
A: Per federal law, the look back period runs forward 60 months preceding a transfer, so gifts 61 months before a Medicaid application are outside the look back period. Consult an elder law attorney or estate attorney versed in Medicaid law. Minor timing errors can cause thousands of dollars of loss. It sounds like you made the look back period but would consult with a local Massachusetts attorney.