Is this the right thing to do? 5. Jim is proud to announce that he is a founding member of the recently formed National Alliance of Attorneys for Alzheimers Planning (N3AP). Although documentation of assets is up to the applicant, many states include an exhaustive asset test conducted by electronic systems with a historical view of accounts. 3 years after that, grandparents used that car from granddaughter as down payment on another car with only their names on title, with understanding that one day original car from granddaughter would be repaid if grandparents were able. So, in a state with this rule, if the surviving spouse dies more than a year after the Medicaid recipient, it will be too late for the state to file its claim for estate recovery. (this is me again) The long answer is that the Medicaid lien could be paid off from the sale of the house when the last surviving homeowner passes away or moves out permanently. To make things a little more complicated, in Arkansas, real property can be co-owned in multiple ways; it can titled as joint tenants with rights of survivorship or as tenants-in-common. Removing an applicants name from an existing joint account may constitute an improper transfer and trigger ineligibility as well (except for spouses, which is discussed in further detail later on). The rules in Texas on this question may lead to a different outcome than the rules she is under in Florida. This is the second of a four-part series exploring how to navigate the complex landscape of Medicaid eligibility with success. Finally, there will be no recovery made against the exempt home of a Medicaid recipient (i.e., it will not have to be sold to pay back the state) in either of these two scenarios: If all else fails, theres an exemption that prohibits estate recovery if such recoupment would place undue hardship on the surviving family members. Either transaction would create a penalty issue, the severity of which depends on the value involved. A husband is diagnosed with Alzheimer's or has a short stay in a nursing home. How much can an elderly parent give as gifts without worrying about "look back" laws? You should consult with an elder law attorney to determine if you can transfer ownership of your share in the property and avoid a Medicaid lien. Medicaids website states that to qualify for the program, you must meet certain income and asset requirements, which can vary by state. From what I understand the car is currently in your name and the options you have are 1) give the sale proceeds to your mother or 2) give the car to your mother. Of course, this is usually true as the account is usually the elder's asset and the child was added for convenience purposes. In many states, the only legal interest of a deceased Medicaid recipient that is taken into consideration is the individuals so-called probate estate. This includes any assets that are titled in the sole name of the beneficiary or as a tenant in common if jointly owned. The law presumes that if the Medicaid applicant is on the financial account, they are a 100% owner. The asset was sold to a private buyer in the fair market value range (per Kelly Blue Book). (Be sure to check your states motor vehicle titling rules to be sure this example will work in your state!). Will the $14k transfer of her funds towards van be seen as gifted since it is not in her name. hbspt.cta._relativeUrls=true;hbspt.cta.load(281126, '08507b6b-519b-4493-aa2a-bb19bde924b3', {"useNewLoader":"true","region":"na1"}); Topics: This article seems to suggest that it doesnt. The plan was to transfer when paid in full and we have documentation supporting that. She is in a nursing home on Medicaid. Therefore, a joint OR account does not have any adverse effect on Medicaid eligibility. Is your mother buying a new car, or stopping driving altogether? Can a spouse live in a home owned by Medicaid? K. Gabriel Heiser, J.D., is an attorney with over 25 years of experience in elder law and estate planning. However, there are some common mistakes other people make that you can avoid which will make your case a little bit easier and a little bit faster. This five-year window is called the Medicaid look-back period. What do you do when you don't have the financial resources to care for an aging parent? We have proof the car used as a trade in came from the granddaughter. What if the medicaid recipient wins a car and pays to upgrade it and he and the spouse already own cars will this affect their medicaid renewal? Medicaid This question has been closed for answers. Will I lose 50 percent of it? There are some exceptions to the penalty rules which many people just don't know about. When your parent applies for nursing home Medicaid in Houston or anywhere in Texas, the past five years of their financial transactions are subject to review. Is TX that considered the amount of contribution when determining the share of ownership??? However, another important property exclusion is activated if the persons spouse or dependent child still lives in the home. The same approach can even be used for a seniors home. The Medicaid Estate Recovery Program (MERP) allows Medicaid to recover the money it spent on your care from your estate. Joint accounts are a countable asset when determining whether a senior qualifies for Medicaid long-term care coverage, and it is crucial to understand that Medicaid counts 100 percent of the value of all joint bank accounts in which the applicant has an interest. There may be other ways to achieve your goals, but without all the information on the case it is impossible to say. 6. In cases where the title on an account reads the applicant and the co-owner (A and B), the signatures of both owners are required to write a check or withdraw money. The information on this website is merely general information. A lien is a claim against a specific piece of property. Going back to the above example, adding the children's names to the mutual fund accounts may prevent Dad from being eligible for Medicaid if the timing is not right. If you transfer an asset for less than fair market value you always trigger the penalty analysis. This is a big deal for me as an elder, Read More We Can Now Protect More Assets From Nursing Homes in 2017Continue, When a parent or spouse goes into a nursing home the first priority should be getting them the best care there. These are the assets that will pass according to a persons will and go through the probate process. The applicant/owner continues to have complete ownership of the account during their life and can withdraw the entire account at any time. Read: Medicaid Spend Down Rules for Married Couples. Dont fearthere may still be hope. 2. Doing so can falsely overstate a seniors assets, thereby disqualifying them from some benefits, and make it very difficult to disentangle your finances without negative consequences. There might be some other strategies available to reach the same result without running into the gift/penalty issue, but that would require further analysis. I chose Berkshire Elder Law Center because Attorney James Sisto is noted as knowledgeable regarding real estate and elder law issues. The Medicaid applicant is allowed to own $2K in countable assets. The house now belongs to you if you jointly own a home with the right of survivorship. 8. What do you do when you don't have the financial resources to care for an aging parent? It doesn't matter which spouse own the assets. The bad news is that home ownership as it relates to Medicaid eligibility is confusing and, if not managed properly, can result in a family losing their home. The fact that the applicant still owns some interest in the asset does not negate the previous gift because they still own less than 100%. Currently, grandmother has suffered stroke, and grandfather has dementia. The lien protects the recipient against anything underhanded that may occur, Golson says. Years of Medicaid-covered skilled nursing care go by, and then the senior passes away. Will Gifting a Car Cause a Medicaid Penalty Period? - ElderLawAnswers Additionally, married couples are treated as one person. According to a U.S. Department of Health and Human Services (HHS) policy brief, states must pursue recovering costs for medical assistance consisting of: Most people mistakenly believe that an aging loved one qualifies for a government handout through Medicaid, but what they really qualify for is an interest-free loan. If your spouse has moved out of the house, however, or if youre single, the house will count toward asset eligibility limits.If your spouse isnt on title but lives in the house and receives a percentage of its ownership under state law, then its probably not considered an exempt asset. Thank you for visiting us, but each state has their own rules and we are only licensed in Texas. The vehicle would be exempt if solely owned by the Medicaid applicant. Federal law determines the minimum and maximum protected resource amounts ($18,552 and $92,760, respectively, in 2004). Some assets are distributed to heirs by the court (probate assets), and some assets bypass the court process and go directly to your beneficiaries (non-probate assets). Their state may attempt to recoup from the deceased person's estate whatever benefits it had paid for their care. The owners of the property could live in the house for 20 years and never contact Medicaid to settle the lien. The car that grandparent bought using granddaughters car as down payment is their only car and neither will be able to drive again. Should I switch my Dad with dementia from a MedAdvantage plan to a Medigap plan + Part D? One of these stories could hold the answers youve been looking for. The car was awarded in the divorce, there is no second car. Im not sure how it is best to handle this since it was her car. At the time, friends and family advise his wife to go ahead and add the children's names to her bank accounts and mutual funds as a way to protect assets from Medicaid and avoid probate. The property lien protects the Medicaid recipient as well. I am a long term care patient of medicaid, and my mother gave me her car in 2016. Jim listened to our wants and needs, tailored the legalese to that end. We purchased a handicap van for her with our money and she was to take proceeds from sale of her to pay for van. Although gift tax is rarely an issue in these transactions, it should be taken into consideration. Rest assured that the Medicaid agency will do its own check and inform the applicant of any obscure properties they own. HMP started in 2014 as part of the Affordable Care Act. Typically, the dependent child (in this case) would be a disabled child, since most elderly applicants will not have minor children. Your email address will not be published. My Elder (single Mother in Law) is entering late stage dementia. For example, a senior (Mary) can title an automobile in joint names with a child (John), such as Mary Smith and John Smith, JTWROS. Upon Marys death, sole title to the car passes automatically to John outside of the probate process. 16 States have the option to raise the minimum to any level up to the Federal maximum. Friendly, non -threatening office. Does Medicaid Have to Be Paid Back After Death? - AgingCare As you describe you are taking an exempt asset (one vehicle) and converting it to a non exempt asset (cash). Under this expanded definition, a persons estate includes jointly owned property, life estates, living trusts and any other assets in which the deceased Medicaid recipient had legal interest at the time of death. Make sure the legal description of the property is correct. Only property titled as joint-tenants with rights of survivorship can potentially be completely protected. This doesnt just apply to seniors in nursing homes either. Certain creations of joint assets may result in divestment's, disqualifying you from receiving Medicaid benefits for a period of time. Do not rely on the general information on this website when making legal decisions. Spousal Impoverishment: Medicaid Spend-Down Rules for Married Couples. What is right for one case may not be proper in another. When it comes to married couples, asset allowances and eligibility rules become more complex. In the case of the home that has so many owners, I do not know what your particular state would do. Preserve your evidence in case you need it during the Medicaid application later. If I add my sons name to my existing bank account, will that affect my ability to qualify for Medicaid? If it is solely for asset protection reasons, there are simpler options in Texas that do not trigger the complications a joint vehicle title brings. Once the spousal allowance is calculated, it is up to the couple to work out the allocation of specific assets. Regardless of whether a senior may need to apply for Medicaid someday, avoid joint accounts and comingling funds if you can. If the client cant enter into the agreement, someone with the power of attorney or a court-appointed conservator has to sign it. The settlement will never be more than the value of the property itself. Are we talking about a 10-year-old Corolla or a brand new Mercedes? In some cases, you can keep your home, even if it is your only asset. Or will this hurt pending Medicaid application for my mother? Heres a typical scenario Ive seen play out many times: A family meets with a certified elder law attorney, comes up with a plan of action for covering the costs of long-term care for an aging loved one, and accounts for the possibility of using Medicaid to assist in this. Two of my sisters currently live there. The whole family is caught off guard. Be aware that the laws for real estate law and other assets may differ from the rules for Medicaid eligibility purposes. My mother is on medicaid and will be receiving an inheritance of approximately 250,000. The question I saw was how the HHSC would interpret the reimbursement transaction. If she received title to the van that was worth $14,000 or more then she received fair value for the cash. The main advantage of joint ownership is that it is simple to accomplish. What Happens to an Unclaimed Inheritance in New York? When the property does sell, it needs to sell for the full market value. If the vehicle is in his name alone and he pays fair market value for the vehicle I do not see a penalty issue there right now, however I cant say definitively without having all the facts. Also if a child who is a joint owner dies, their share does not pass to their children automatically, but rather to the other sibling joint owners. Through careful asset protection planning and Medicaid spend-down processes, the family has managed to preserve many of the seniors assets and feels that the lawyers fees were well worth it! Any assets (including real estate) that you own and that have cash value are considered by Medicaid to be available to you for your care.If youre applying for Medicaid, Medicaid will review the home as an asset when determining your eligibility for benefits. Medicaid will take a jointly owned home as part of its calculation of an individuals assets, but it will not take a jointly owned home if the other owner occupies it and is not on Medicaid. Should I assume that this $4000 would then be counted as an asset, obviously putting her above the $2000 asset threshold? Bobby Stephenson. It will also never be more than the benefits that Medicaid paid out to the recipient. And of course, if there are other topics you think I should discuss , please let me know! Simple Vehicle Transactions That Create Big Medicaid Problems Some states permit adding another person to the deed by giving them less than 50 percent interest, which could reduce the amount of the gift, but that is something only an experienced attorney in your state can determine for you. Can transferring a car title affect Medicaid eligibility? The information on this website is the property of The Elrod Firm, and cannot be reused or disseminated without the express written consent of The Elrod Firm. I would tackle this from a different angle. Can Medicaid Take a Jointly Owned Home in North Carolina? Be aware of the pitfalls of joint accounts when planning and preparing for Medicaid application. Medicaid places a lien on the recipients properties when they start receiving benefits. Another important consideration in this scenario is the possibility of John getting sued or divorced. Long-term institutional services, such as nursing home care; Home- and community-based services (HCBS); Hospital and prescription drug services provided while a beneficiary was receiving either of the above types of care; and. Each category has income limits and some have asset limits. This means that either one of you could be ineligible for Medicaid for a period of time, depending on the amount of money in the account. In these states, assets that do not go through the probate process, such as joint bank accounts, stocks with a TOD (transfer on death) beneficiary, bank accounts with a POD (payable on death) beneficiary, annuity interest and real estate that is titled as joint tenants with right of survivorship (JTWROS), are all protected against the states claim for reimbursement. This total is used to calculate the amount of assets a community spouse is permitted to keep within annually set guidelines. When your spouse eventually dies, however, any equity left in the house will be counted toward his estate and will be used to pay off his medical expenses before being passed on to his survivors. If a joint bank account is titled in the name of the applicant or other owner (A or B), then both owners can independently write checks or withdraw money from the account. My question is, in order to spend down a rather large nest egg would it be permissible for me to purchase a midsize SUV in order to transfer her to the countless medical appointments she now has. 1. He was always available to answer any of my questions or to return any of my calls. If Sissy #1 didn't live in the house and doesn't have that as her legal address or have it on file for homestead exemption with her name on it, then Medicaid is probably going to look at it as a non-exempt asset with the value of the asset based on the annual assessor's property tax report. And once discovered, a costly penalty can follow. This is a process that can occur after a Medicaid recipient dies. The Medicaid lien only attaches to that portion of equity that exceeds $552,000 in value (as of January 1, 2019). Here is a quote from the HHSC on how they handle jointly owned vehicles purchased with a Medicaid applicants funds. Hi, thank you for this article. Where exactly is this money coming from to pay Medicaid back?. If during those last five years, your parent purchased a car or vehicle and put anybody elses name on the title to the vehicle other than their spouse you may have a Medicaid gift penalty to deal with. The property lien has to be signed by the client.