I'm not sure what exactly you are referring to with regards to a 13k gift. My limited knowledge of the 5-year look back is related to assets that have been transferred into someone else's name or a Trust as well as assets that have been given away to another individual within the 5-years prior to the date of applying for Medicaid. Under some, but not all circumstances, assets (money included) that has been transferred and/or given away outside of the 5-year period are not subject to scrutiny as part of the Medicaid qualification process but those assets that have been transferred and/or given awaying inside of the 5-year period are subject to scruntiny and are usually included in determining the candidate's total assets. My specific experience: When getting my grandfather qualified, because my grandmother was alive, their home was by default not considered in the equation (aside from the deed had to be transferred out of my grandfather's name an solely into my grandmother's) but there was still an asset amount maximum that was set and there was a level of "spend down" that had to be done in order for him to qualify. After my grandfather passed away, their Attorney advised that we move everything into a Trust so that nothing would be in my grandmother's name (she was diagnosed with Alzheimer's) and that after at least 5 years, if she needed to qualify for Medicaid, her home and other assets would not be a factor in her qualification. Unfortunately, within a max of 2 year, my grandmother had to be placed in a nursing home and when Medicaid did their 5 year look back, they saw that she owned a home and other assets; the fact that these had all since been moved into a Trust was completely irrelevant in their eyes. So that leaves us having to get all of those assets sold in order for her to qualify for Medicaid. On top of all that, the Medicaid folks have told us that we must transfer everything out of the Trust and back into my grandmother's name (yes, the attorney has to do all of the paperwork to undo what he just did a few years ago) and my grandmother's home has been on the market for several months now. Medicaid has proof of the home being for sale so at this point we are hoping for "conditional" qualification at least.
I'm not sure if the 13k gift you mention has to do with monies that the person who is applying for Medicaid gave to someone or received. Either way, I would think that if either occurred within 5 years of applying for Medicaid then it may be considered an asset and potentially subject to spend-down or even a penalty (I don't know much about penalties, but our case worker has mentioned it in passing on many occasions). The rules vary from state to state, my experience is based on New Jersey. If you don't feel comfortable discussing with a Medicaid case-worker, definitely try to talk to an attorney that is well versed in elder care and/or estate planning.
Ohio - I am in the process "spending down" to get my Dad qualified for Medicaid. My mom is still alive and my dad has been admitted for long term care into a NH and they have very little money. There are a number of calculations based on average life expectancies that determine how much the "community spouse" can keep. Once that number is determined, you have to spend down to it. That included cashing in life insurance policies, (although they get to keep at least one with a value no more than $1500), and any stocks or investments. The 5-year look back is for the governmnet to see if you were trying to hide money. So if you think an elder is going to need nursing home care with 5 years (but who really knows that!), don't give away large sums of money to relatives. That would make you Medicaid ineligible for a period of time. They call it a penalty. At that time, all nursing home costs would be private pay until you are eligible again. There are different rules in differetn states and if a community spouse is still alive, like they can't take your home or car. So we are prepaying both their funeral expenses (allowed), buying Mom some new clothes and shoes (allowed) and new hearing aids. As long as the items you buy are for the direct benefit on the institutional spouse or the community spouse and you can prove the purchase, you can spend it. But you can't buy at $3,000 watch! Any transaction over $1,000 will be looked at. Hope this helps!
I am confused about how much money a parent can "gift" her children - she is already in assisted living (private pay), no living spouse, no way of predicting how long she will be in assisted living other than deducting $5500 per month from her assets to come up with the month and year she will be "booted out". If I am understanding this correctly the parent is no longer allowed to "gift" anything to her children as soon as any health issue presents itself...due to the Medicaid watchdogs??? Would that be a correct assessment of the rules of the road?
Wow, lots of good information here. SelfishSiblings, do you know if they are forced to cash in an annuity, even if it was purchased more than 5 years ago or less than 5 years ago? Do you know how we can get a list of what is "allowable"?
I am an attorney with 25 years' experience doing Medicaid planning. My book "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets" is devoted to answering this question and also how to plan to minimize or eliminate asset spend downs! That being said, let me clear up a few items discussed above:
1. $13,000 gift exemption: This figure relates solely to a Federal GIFT TAX exemption and has no relation to Medicaid rules. Anyone concerned with Medicaid coverage will never make anywhere near the $5,120,000 of lifetime gifts permitted before a federal gift tax is due! Thus, for all practical purposes, the $13,000 limit can be ignored for anyone worried about Medicaid.
2. 5-Year Lookback: As stated by others above, when a person makes a gift of virtually any amount within the 5-year period preceding the date that person applies for Medicaid, those gifts are added together and will result in a disqualification period. The length of the disqualification (or "penalty") period depends on the total amount of the gifts made within the 5-year period and also the penalty divisor of the state where they are applying for Medicaid. For example, in a state where the penalty divisor is $5,000, if the total gifts made within the lookback period equal $50,000, then the penalty will be 10 months.
So the bottom line is that there is NO minimum amount a parent can gift their children to avoid the 5-year lookback period. But once 5 years has passed following a particular gift, that gift will no longer count when the person who made the gift applies for Medicaid.
Some elder law attorneys charge for their advice by the hour, and can generally give you an estimated charge up front. Other attorneys will charge a flat fee and also tell you that amount up front. In all cases be sure to get a written fee agreement to avoid any misunderstandings! Because every person's situation is unique, there is no one-size-fits-all Medicaid plan for everyone. Accordingly, every plan is customized for that particular client, making it more expensive.
Ohio, NH (aka skilled nursing facility/SNF or long term care/LTC) is paid for 3 ways: 1) private pay by either the elder or their family; 2) from LTC insurance; or 3) by qualifying for Medicaid, a needs based entitlement program that is a state and federal partnership (unlike Medicare - which is federal).
Because of this, Medicaid rules are determined by each state & are state specific under a federal "umbrella" of guidelines. So how it runs in GA will be different yet sometime similar than TX program. A lot of what happens, especially after the Medicaid recipient dies, is very much dependent on what the states view is on property rights, estate/death, probate laws, etc. Yep, confusing.
For NH Medicaid eligibility, an individual must show that: 1) are 65+, 2) medical condition requires that level of nursing care, Just being old, having dementia, etc. may not be enough. 3) monthly income at or below their states max (about 2K), This is the “income test”– how much $ do you make. Texas is $2,094. 4) all countable assets are at or below 2K This is the “asset test” – how much $ do you own. 5) not gifted away anything of value during 5yr look-back period.
If you do, there could be a “transfer penalty” when items are gifted. Penalty different for each state as it’s based on each state’s NH reimbursement rate. For Texas, it is $ 142.92 a day rate.
Max look-back is 5 yrs. Most states require 3 – 6 mo. of financials along with all life funeral, burial & health insurance policies with initial Medicaid application. The NH usually submits the application with whatever documents you give them along with their request for payment from the state. The state can require more financials if something pique’s interest or something is unclear.
INCOME: This is their SS monthly check and any retirement or other $ paid to them on a regular basis. The max is basically 2K, & each state has it's own specific amount. If there is a community spouse, the income allowed is different. If it is that every month they are over the states income limit BUT not enough to pay in full for the NH and qualifies for NH in every other way, then they can see an elder care attorney to do a "Miller Trust" or a "Qualified Income Trust". Say mom gets 1K from SS & 1,500K from retirement every mo. Income = $2,500. Basically is $ 500 over ceiling for monthly income. No matter what is always is $500 over. So this excess $ 500 is what funds the trust and therefore mom’s income is now 2K and within the states income ceiling. The beneficiary of the trust is state's Medicaid program and upon death reverts to the state. Miller really has to be done by an attorney who does elder law as it needs to be flexible/adaptable and meet the criteria of each state's law on probate (death laws) & Medicaid rules.
ASSETS: All assets are counted, unless the assets fall within the short list of "noncountable" assets. The noncountable's are: - personal possessions, - a vehicle (some states have a limit on the value) - their principal residence, provided it is in the same state in which the individual is applying for coverage & the house may be kept with no equity limit if "community spouse" lives there; otherwise the equity limit is 500K (750K in some states) - prepaid funeral (irrevocable, NCV, usually 10K max) - small amount of term life insurance (usually $1,500 & NCV) All other assets (savings, stocks, cash value insurance policies, rental property) are counted.Must “spend down” to get to their states max (+/- 2K) to qualify.
The financials are what most folks focus on. But remember that they also need to medically qualify for skilled care for Medicaid.
Most NH admissions come from a hospital discharge. If an individual covered by MediCARE is discharge from a hospital to a nursing home for continued care (rehabilitation) after an inpatient stay of at least 3 days, Medicare will cover 100% of the first 20 days and MAY pay up to 100 days, subject to a co-payment by the patient of $141.50 per day for days 21 to 100 (for 2011). Medicare does not pay for the many months/years that some people reside in a NH for long-term custodial care. In general, Medicare is limited to short-term acute care. But this MediCARE paid time in NH is when you need to get the documents together to apply for MedicAID if you need to go that route. Good Luck & keep a sense of humor.
I was going to answer this question as I'm currently handling all of this for my parents right now, Dad in NH and Mom is the Community Spouse, but Igloo got it down pat. Wow! Very impressed. Wish I had that post a month ago!!
SS - Igloo here. Thanks for the compliment. I view this as my on-line mitzvah. Did not have to deal "community spouse" but one of my high school friends who's mom is 1 block over from my mom's house did. Here's what she told me:
COMMUNITY SPOUSE: For couple's, Day 1 of "institutionalization" (day one when 1 of them entered the NH) is the key date for finances, the "snapshot" day. Where all their finances & assets are as of that day are "set". So you kinda have to be on top of making sure all checks are cleared or money spent and out of the bank accounts before Day 1.
If your parents have assets they are expected to do private pay @ the NH or "spend down" assets to get to their state's couples asset ceiling to be Medicaid covered. For couples, your mom would be a "community spouse" as such the asset ceiling is higher and is limited to ½ of couple's joint assets.This is “spousal protected resource allowance” equal to one-half of the countable resources but not more than $109,560 in 2011. I think it’s this amount for all states???.
The "spend-down" for couples kinda needs to be done differently if the spouse is staying at the house in order to have the best use of $$. If they have a home, prepay for utilities, cable, insurance, do repairs, replace appliances. If your mom is planning on staying at the home, spending down by paying off the mortgage, is often a super good plan as this is usually a big chunk of $$. It took them almost 4 weeks to clear the mortgage so planning ahead is really important.
For spouse's there's other issues, like how to deal with income if she still works or if she never worked and her only income is his SS &/or retirement and she need's to get a MMMNA - minimum monthly maintenance needs allowance. (Say that 3 times fast!) These are all sticky, you'll likely need someone to work with you in figuring that out like an elder care attorney. The MMMNA is based on your state's AVERAGE and seem to be on the low pitiful side. Often the CS will have to do an appeal to the state for more MMMNA or get a court order for spousal support to get more monthly support. My friend's mom had to go to court to get the MMMNA increased because of the cost of repairs to the house after a hail storm.
Transfer penalty: For couples, getting rid of the extra unneeded car (as dad is in the NH so no more driving) is often the glitch as they give it to one of the kids for free and then have a Kelly blue-book based Medicaid transfer penalty for the value of the car hit them 3 -5 months later. Property ownership is recorded by the state so it's easy for Medicaid to do a cross check for registration and sales, but the state moves glacially so it might not show up in the initial review of the Medicaid application. So that 20K car is 4 mo. penalty if your states NH avg cost is 5K a month. For couples, it's kinda better to turn in both cars and get 1 newer, more dependable one for the still at home spouse to drive and also as the car is an allowable exemption when & if they ever go into a NH later on.
Being "community spouse" really is a whole different mindset in how to handle. The big thing for Carol was that they didn't think about was what would happen if mom should die before dad, and their will was like most couple's wills...where the surviving spouse inherits all...this totally changes the dad's assets.Then the NH spouse inherits all and then becomes disqualified from Medicaid because now they have all of CS assets,so state goes after all money from the CS inherited assets to reimburse for the NH spouse expenses. It's the sort of thing you don't think about especially if the CS is much younger. But stuff happens. What they need to do is to have an attorney do a separate property agreement so that everything is owned by the community spouse (acceptable under their states Family Code) and change the will so that the heirs to the community spouse is NOT their spouse in the NH. Or have it so that the kids are the CS heirs and set up a "special needs trust" for the NH spouse that runs only for their lifetime. Again, all this really needs to be done by elder care or a good estate attorney.
Oh and when they paid off the mortgage, they got hit with an early payment penalty as it was before the 30 yr run for the full mortgage. She told me that they could have challenged it and worked it out but it would have dragged it on for another month and they needed the $$ cleared asap before snapshot day 1.
I have just become a widow and my mother is almost 80. She has offered to sell me her house at a price I can afford which is below market value. She will live in the home with me for as long as she can. She is planning on giving the funds to all her children now. If I get this right as long as five year go by and she doesn't need NH care we are fine but if she needs care we may have problems. I did read somewhere that if she transfers the home to me and I can keep her home for at least 2 years that will be allowed and we won't have a problem? She is healthy I just need to know all the options before we do anything.
The rule is this: If a "caretaker child" lives with a parent and takes care of a parent for at least two years immediately preceding the parent's entering a nursing home, and because of such care the parent is able to delay entering the nursing home, then the parent can gift the house to the child without incurring a penalty for Medicaid purposes. Note that you will need to document the care that you give your mother and the fact that BUT FOR such care, she would have needed to move into a nursing home. You will need a doctor's letter to this effect, too.
The timing requires that you live with her for at least two years, she moves into the nursing home, she transfers the house to you.
My father gave me $10,000 to pay for a needed neck surgery 2years ago. This was my out of pocket expense from my health insurance. This was within the look back period and he is now applying for medicaid. Is that still considered a gift since it was an emergency surgery? Is this exempt from any medicaid penalty?
Although there is an exception for gifts made to pay for medical care under the federal gift tax laws, there is no similar exception under the Medicaid rules. Unfortunately, the gift will be deemed a penalty-causing transfer unless you can prove that such gift was "exclusively made for a purpose other than to qualify for Medicaid." If you can back that up, and the caseworker agrees, then it will not cause a penalty, even though it was made within the 5-year lookback period.
Some states exempt income-producing property such as rental real estate and will exclude it when calculating the assets of the individual applying for Medicaid. However, many states do not have that exemption. Once again, you need to find out the rule in your state before doing your planning!
What about a streaming annuity to place my Mom's savings in? Can the nursing home then take that monthly in addition to her pensions/SS, and she then qualify for the balance to be paid for by medicaid?
The question isn't whether the income is counted. It's counted in ALL states--as income. Thus the owner of the real estate must include the net income as part of their countable income for Medicaid eligibility purposes.
What does vary from state to state is the treatment of the underlying real estate itself, whether it is a countable asset or not. Some states exclude it, some don't.
As for NY state, I'm not a NY attorney and cannot answer that question. Maybe a NY lawyer can post the answer here or you can do some further research on your own. Sorry about that.
I recently paid an Elder law atty. $375. just for consult. If I proceed to having a Special needs irrocable trust set up along with living will, POA , etc. the total cost will be $5,600. I'm scared to death to go ahead with this as even though expained to me. it just seems much too complicated ! I am in process of selling my home & going into a over 55 residendial rental to make life easier for me. I am 80 y.o. The money aspect , spend dpwn is just so hard to understand. What about my rental , utilities, normal expenses ? The cost of rental alone is $1300./mo. We do need some easier to grasp info ! Thank you for this great informational "Aging Care " !
Mom died four years ago, and Dad is in a NYS Nursing Home paying $440/day for a private room. My mother promised to pay my student loans (currently around $60,000 owed to Key Bank and consolidated). If my father wants to honor my mother's promise I know he could write a check made out directly to Key Bank paying off the debt. My question is will that money be considered a gift to me for Medicaid eligibility purposes? Would I be expected to pay it back to the State in order for Dad to avoid a penalty under the five-year look back rule?
The only way to avoid the imposition of a penalty when a person makes a gift within the 5 year period before applying for Medicaid is if the gift is returned promptly. Since the promise to pay your loans is not enforceable, such payment would be considered a gift, and therefore subject to the 5-year lookback period. If your father wrote a check to the bank that relieved your legal obligation, it would still be deemed a gift to you, since you would be the one benefiting from such check. In order to reverse the gift, you would not pay the state the money, you would have to pay your father the money. If he had already given it to the bank, that would cause a major problem, since you wouldn't have the money to give back to him! If I were you, I would explore other options at this point, such as a personal services contract. You may want to consider hiring an elder law attorney who specializes in Medicaid planning.
What is meant by " no 5 yr. look back " , is exempt when setting up a irrevocable trust for disabled adult daughter ? Very confusing to most of us. Thank you.
When a person applies for Medicaid for nursing home coverage, the form asks if you have made any gifts or transfers within the prior 5 years. That's considered the "5-year lookback period." If the answer is Yes, then you must list all items gifted during that period, and list the value of the item (if other than cash). Every gift made within the prior 5 years is then added up and the total amount is then divided by the average cost of a nursing home in your region (usually the entire state has one region, but some states have different geographic regions for these purposes). So, for example, if the total amount of gifts equal $50,000, and the average cost of a nursing home in your region is $5,000 (this number is determined by the state government), then there is a 10-month penalty period: $50,000 divided by $5,000 = 10 months. What that means is Medicaid will not cover you until that 10-month penalty period has passed. Note that the penalty period does not start until (i) you actually apply for Medicaid and (ii) you would have qualified for Medicaid benefits BUT FOR the gifts made during the prior 5-year period. Hope that helps!! I go into great detail with more examples in my book, "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets".
perhaps I've worded my question incorrectly. I've been told that if I set up an irrevocable special needs trust for my adult disabled daughter, the 5 yr. look back will not apply. Thank you.
There is an exception to the transfer penalty rules for a transfer directly to a disabled child (of any age) or to an irrevocable trust for their benefit. I am glad you brought that up! These and other exceptions to the transfer rules are covered extensively in a chapter in my book, available at www.MedicaidSecrets.com. It really helps to be armed with the rules and exceptions. to help with your Medicaid planning!
I'm not sure if the 13k gift you mention has to do with monies that the person who is applying for Medicaid gave to someone or received. Either way, I would think that if either occurred within 5 years of applying for Medicaid then it may be considered an asset and potentially subject to spend-down or even a penalty (I don't know much about penalties, but our case worker has mentioned it in passing on many occasions). The rules vary from state to state, my experience is based on New Jersey. If you don't feel comfortable discussing with a Medicaid case-worker, definitely try to talk to an attorney that is well versed in elder care and/or estate planning.
Sorry to be long-winded. Hope this helps.
Hope this helps!
xo
-SS
1. $13,000 gift exemption: This figure relates solely to a Federal GIFT TAX exemption and has no relation to Medicaid rules. Anyone concerned with Medicaid coverage will never make anywhere near the $5,120,000 of lifetime gifts permitted before a federal gift tax is due! Thus, for all practical purposes, the $13,000 limit can be ignored for anyone worried about Medicaid.
2. 5-Year Lookback: As stated by others above, when a person makes a gift of virtually any amount within the 5-year period preceding the date that person applies for Medicaid, those gifts are added together and will result in a disqualification period. The length of the disqualification (or "penalty") period depends on the total amount of the gifts made within the 5-year period and also the penalty divisor of the state where they are applying for Medicaid. For example, in a state where the penalty divisor is $5,000, if the total gifts made within the lookback period equal $50,000, then the penalty will be 10 months.
So the bottom line is that there is NO minimum amount a parent can gift their children to avoid the 5-year lookback period. But once 5 years has passed following a particular gift, that gift will no longer count when the person who made the gift applies for Medicaid.
I hope that helps!
Because of this, Medicaid rules are determined by each state & are state specific under a federal "umbrella" of guidelines. So how it runs in GA will be different yet sometime similar than TX program. A lot of what happens, especially after the Medicaid recipient dies, is very much dependent on what the states view is on property rights, estate/death, probate laws, etc. Yep, confusing.
For NH Medicaid eligibility, an individual must show that:
1) are 65+,
2) medical condition requires that level of nursing care,
Just being old, having dementia, etc. may not be enough.
3) monthly income at or below their states max (about 2K),
This is the “income test”– how much $ do you make. Texas is $2,094.
4) all countable assets are at or below 2K
This is the “asset test” – how much $ do you own.
5) not gifted away anything of value during 5yr look-back period.
If you do, there could be a “transfer penalty” when items are gifted. Penalty different for each state as it’s based on each state’s NH reimbursement rate. For Texas, it is $ 142.92 a day rate.
Max look-back is 5 yrs. Most states require 3 – 6 mo. of financials along with all life funeral, burial & health insurance policies with initial Medicaid application. The NH usually submits the application with whatever documents you give them along with their request for payment from the state. The state can require more financials if something pique’s interest or something is unclear.
INCOME: This is their SS monthly check and any retirement or other $ paid to them on a regular basis. The max is basically 2K, & each state has it's own specific amount. If there is a community spouse, the income allowed is different.
If it is that every month they are over the states income limit BUT not enough to pay in full for the NH and qualifies for NH in every other way, then they can see an elder care attorney to do a "Miller Trust" or a "Qualified Income Trust". Say mom gets 1K from SS & 1,500K from retirement every mo. Income = $2,500. Basically is $ 500 over ceiling for monthly income. No matter what is always is $500 over. So this excess $ 500 is what funds the trust and therefore mom’s income is now 2K and within the states income ceiling. The beneficiary of the trust is state's Medicaid program and upon death reverts to the state. Miller really has to be done by an attorney who does elder law as it needs to be flexible/adaptable and meet the criteria of each state's law on probate (death laws) & Medicaid rules.
ASSETS: All assets are counted, unless the assets fall within the short list of "noncountable" assets. The noncountable's are:
- personal possessions,
- a vehicle (some states have a limit on the value)
- their principal residence, provided it is in the same state in which the individual is applying for coverage & the house may be kept with no equity limit if "community spouse" lives there; otherwise the equity limit is 500K (750K in some states)
- prepaid funeral (irrevocable, NCV, usually 10K max)
- small amount of term life insurance (usually $1,500 & NCV)
All other assets (savings, stocks, cash value insurance policies, rental property) are counted.Must “spend down” to get to their states max (+/- 2K) to qualify.
The financials are what most folks focus on. But remember that they also need to medically qualify for skilled care for Medicaid.
Most NH admissions come from a hospital discharge. If an individual covered by MediCARE is discharge from a hospital to a nursing home for continued care (rehabilitation) after an inpatient stay of at least 3 days, Medicare will cover 100% of the first 20 days and MAY pay up to 100 days, subject to a co-payment by the patient of $141.50 per day for days 21 to 100 (for 2011). Medicare does not pay for the many months/years that some people reside in a NH for long-term custodial care. In general, Medicare is limited to short-term acute care. But this MediCARE paid time in NH is when you need to get the documents together to apply for MedicAID if you need to go that route. Good Luck & keep a sense of humor.
Good luck all.
-SS
Did not have to deal "community spouse" but one of my high school friends who's mom is 1 block over from my mom's house did. Here's what she told me:
COMMUNITY SPOUSE: For couple's, Day 1 of "institutionalization" (day one when 1 of them entered the NH) is the key date for finances, the "snapshot" day. Where all their finances & assets are as of that day are "set". So you kinda have to be on top of making sure all checks are cleared or money spent and out of the bank accounts before Day 1.
If your parents have assets they are expected to do private pay @ the NH or "spend down" assets to get to their state's couples asset ceiling to be Medicaid covered. For couples, your mom would be a "community spouse" as such the asset ceiling is higher and is limited to ½ of couple's joint assets.This is “spousal protected resource allowance” equal to one-half of the countable resources but not more than $109,560 in 2011. I think it’s this amount for all states???.
The "spend-down" for couples kinda needs to be done differently if the spouse is staying at the house in order to have the best use of $$. If they have a home, prepay for utilities, cable, insurance, do repairs, replace appliances. If your mom is planning on staying at the home, spending down by paying off the mortgage, is often a super good plan as this is usually a big chunk of $$. It took them almost 4 weeks to clear the mortgage so planning ahead is really important.
For spouse's there's other issues, like how to deal with income if she still works or if she never worked and her only income is his SS &/or retirement and she need's to get a MMMNA - minimum monthly maintenance needs allowance. (Say that 3 times fast!) These are all sticky, you'll likely need someone to work with you in figuring that out like an elder care attorney. The MMMNA is based on your state's AVERAGE and seem to be on the low pitiful side. Often the CS will have to do an appeal to the state for more MMMNA or get a court order for spousal support to get more monthly support. My friend's mom had to go to court to get the MMMNA increased because of the cost of repairs to the house after a hail storm.
Transfer penalty: For couples, getting rid of the extra unneeded car (as dad is in the NH so no more driving) is often the glitch as they give it to one of the kids for free and then have a Kelly blue-book based Medicaid transfer penalty for the value of the car hit them 3 -5 months later. Property ownership is recorded by the state so it's easy for Medicaid to do a cross check for registration and sales, but the state moves glacially so it might not show up in the initial review of the Medicaid application. So that 20K car is 4 mo. penalty if your states NH avg cost is 5K a month. For couples, it's kinda better to turn in both cars and get 1 newer, more dependable one for the still at home spouse to drive and also as the car is an allowable exemption when & if they ever go into a NH later on.
Being "community spouse" really is a whole different mindset in how to handle. The big thing for Carol was that they didn't think about was what would happen if mom should die before dad, and their will was like most couple's wills...where the surviving spouse inherits all...this totally changes the dad's assets.Then the NH spouse inherits all and then becomes disqualified from Medicaid because now they have all of CS assets,so state goes after all money from the CS inherited assets to reimburse for the NH spouse expenses. It's the sort of thing you don't think about especially if the CS is much younger. But stuff happens. What they need to do is to have an attorney do a separate property agreement so that everything is owned by the community spouse (acceptable under their states Family Code) and change the will so that the heirs to the community spouse is NOT their spouse in the NH. Or have it so that the kids are the CS heirs and set up a "special needs trust" for the NH spouse that runs only for their lifetime. Again, all this really needs to be done by elder care or a good estate attorney.
Oh and when they paid off the mortgage, they got hit with an early payment penalty as it was before the 30 yr run for the full mortgage. She told me that they could have challenged it and worked it out but it would have dragged it on for another month and they needed the $$ cleared asap before snapshot day 1.
The timing requires that you live with her for at least two years, she moves into the nursing home, she transfers the house to you.
What does vary from state to state is the treatment of the underlying real estate itself, whether it is a countable asset or not. Some states exclude it, some don't.
As for NY state, I'm not a NY attorney and cannot answer that question. Maybe a NY lawyer can post the answer here or you can do some further research on your own. Sorry about that.
If I proceed to having a Special needs irrocable trust set up along with living will, POA , etc. the total cost will be $5,600.
I'm scared to death to go ahead with this as even though expained to me. it just seems much too complicated !
I am in process of selling my home & going into a over 55 residendial rental to make life easier for me.
I am 80 y.o.
The money aspect , spend dpwn is just so hard to understand.
What about my rental , utilities, normal expenses ? The cost of rental alone is $1300./mo.
We do need some easier to grasp info !
Thank you for this great informational "Aging Care " !
Very confusing to most of us.
Thank you.
I've been told that if I set up an irrevocable special needs trust for my adult disabled daughter, the 5 yr. look back will not apply.
Thank you.