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
Will a life estate protect the home from liens?
A lien may still be filed against the property, but it will only be against the life estate interest. Such lien will prevent the transfer... A lien may still be filed against the property, but it will only be against the life estate interest. Such lien will prevent the transfer of the life estate during the existence of the lien. However, since the life estate terminates automatically at the death of the individual holding the life estate, the lien would have no interest to attach to at that time. That does not mean that the state will be unable to recoup the Medicaid benefits paid to the recipient in the nursing home, IF the state allows for such recoupment against life estates. This varies from state to state, so you will need to find out the rule in your state about this. see more
Question
If my house is in my Dad's trust can the POA take it from me?
The agent under the Power of Attorney has no control over assets that are not in your dad's sole name. Since the house is titled in the... The agent under the Power of Attorney has no control over assets that are not in your dad's sole name. Since the house is titled in the name of the trust, the agent has no control over the house: only the trustee of that trust has such control.
The trustee must follow the terms of the trust regarding what he or she may or must do to pay out any of the trust income or assets to or for the benefit of your father; this includes the possibility of selling the house if need be.
However, such decision would be solely that of the trustee and not the agent under the POA. see more
The trustee must follow the terms of the trust regarding what he or she may or must do to pay out any of the trust income or assets to or for the benefit of your father; this includes the possibility of selling the house if need be.
However, such decision would be solely that of the trustee and not the agent under the POA. see more
Question
Mom went into nursing home, I'm cashing in an annuity. Can I pay her credit cards given the look back 5 yea...
I would not advise stiffing the credit card company when you have the money to pay them back for legitimate expenditures your mother made.... I would not advise stiffing the credit card company when you have the money to pay them back for legitimate expenditures your mother made. If a person has a legitimate debt and the means to pay it back, then the person should do so.
Regarding the annuities, before you cash them in consider converting them to a type of annuity known as a "Medicaid-qualifying" annuity. This type of annuity pays out a monthly amount, while the balance of the annuity is no longer a countable asset for Medicaid eligibility purposes. Essentially, the annuity balance has "disappeared" for Medicaid purposes. This type of planning is explicitly approved by the federal government in the Medicaid laws. Note that not all annuity salesmen are familiar with how this works, so choose carefully and consult with an elder law attorney for the best advice about these. see more
Regarding the annuities, before you cash them in consider converting them to a type of annuity known as a "Medicaid-qualifying" annuity. This type of annuity pays out a monthly amount, while the balance of the annuity is no longer a countable asset for Medicaid eligibility purposes. Essentially, the annuity balance has "disappeared" for Medicaid purposes. This type of planning is explicitly approved by the federal government in the Medicaid laws. Note that not all annuity salesmen are familiar with how this works, so choose carefully and consult with an elder law attorney for the best advice about these. see more
Question
Any advice regarding splitting out joint financial accounts into his and her's prior applying for Medicaid?
The rules governing joint accounts are based on federal law, so do not vary from state to state. It does not matter in whose name an asset... The rules governing joint accounts are based on federal law, so do not vary from state to state. It does not matter in whose name an asset is titled, be it cash, stocks, bank account, etc. All of the assets (husband, wife, and joint) are totaled up and then the Medicaid calculation is applied to that total. The spouse entering the nursing home is only allowed to keep up to $2,000, and the at-home spouse is allowed $117,240 (this number typically changes each year, based on inflation). The balance--if any--must be either spent down, converted to an asset that is exempt for Medicaid purposes, or given away. Note, however, that any gifts within 5 years of applying for Medicaid will result in a period of Medicaid disqualification. There are a few exceptions to this rule, but you'll need to read my book on all of this, called "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets." It goes into great detail of how a married or single person can plan and save money while qualifying for Medicaid. Read about it here: www.MedicaidSecrets.com. see more
Question
If an irrevocable trust is created. Is there a cap on how much money could be taken out of it yearly?
"Irrevocable" simply means the trust cannot be revoked, and almost always also means the terms of the trust cannot be changed or... "Irrevocable" simply means the trust cannot be revoked, and almost always also means the terms of the trust cannot be changed or amended. However, beyond that, there is a tremendous amount of flexibility in how much money can be distributed to the person who establishes the trust. If you are referring to an existing trust, you must carefully read the words of the trust, and you may need an attorney's assistance with this if you cannot understand what it says.
If you are considering creating an irrevocable trust, then note that under Medicaid rules, if there are "any circumstances" in which the creator of the trust can access the principal of the trust, then the entire amount of the trust will be considered a countable asset for Medicaid eligibility purposes.
I have an entire chapter in my Medicaid Secrets book on irrevocable trusts and how they can be used for Medicaid planning. It is indeed a complicated topic! see more
If you are considering creating an irrevocable trust, then note that under Medicaid rules, if there are "any circumstances" in which the creator of the trust can access the principal of the trust, then the entire amount of the trust will be considered a countable asset for Medicaid eligibility purposes.
I have an entire chapter in my Medicaid Secrets book on irrevocable trusts and how they can be used for Medicaid planning. It is indeed a complicated topic! see more
Question
Do I need to report the sale of my home and will this disqualify me for Medicaid?
If the loan was a legally enforceable one, i.e., a written contract, then using the proceeds to pay down the loan would quickly reduce the... If the loan was a legally enforceable one, i.e., a written contract, then using the proceeds to pay down the loan would quickly reduce the home sale proceeds to below $2,000 as you indicated. As such, although the sale of the home must be reported to Medicaid, it will not impact your eligibility if the proceeds from the sale are used to pay off the loan in the same month you receive the proceeds.
If the loan was never properly documented and not legally enforceable, then Medicaid may look at the payoff as a gift, which results in a period of disqualification from Medicaid. see more
If the loan was never properly documented and not legally enforceable, then Medicaid may look at the payoff as a gift, which results in a period of disqualification from Medicaid. see more
Question
Medicaid told us to reverse our quit claim and do life estate. Can we keep the house?
Since the rules on estate recovery vary from state to state, I suggest you call the Texas Department of Aging and Disability Services... Since the rules on estate recovery vary from state to state, I suggest you call the Texas Department of Aging and Disability Services (DADS) toll-free at 1-800-458-9858. This line is answered 8 a.m. – 5 p.m., Monday through Friday. Voicemail is available 24 hours a day. You may also visit the DADS website at www.dads.state.tx.us/services/estate_recovery. see more
Question
Should POA have a copy of the Will?
I've drafted hundreds of wills and POAs. Countrymouse's comments are 100% correct! Well said.
Question
Can you receive VA benefits and draw Medicaid if you have to go to a nursing home?
If you receive VA Pension and have no spouse or child, then--if you are in a nursing home and covered by Medicaid--the VA Pension is... If you receive VA Pension and have no spouse or child, then--if you are in a nursing home and covered by Medicaid--the VA Pension is reduced to $90 per month. Veterans residing in state-run veteran's homes are exempt from this limit.
If you have a spouse or child, then you receive the full VA Pension amount and it counts toward the income limits of Medicaid. Note that the “aid and attendance allowance” or “housebound allowance” portion of a Pension payment does not count as “income” for Medicaid purposes.
In 2014, the income limit for Medicaid is set at $2,163, but in many states this can be reduced by medical expenditures or having the income paid into a type of simple trust. The income rules are discussed in much more detail in my book, Medicaid Secrets. see more
If you have a spouse or child, then you receive the full VA Pension amount and it counts toward the income limits of Medicaid. Note that the “aid and attendance allowance” or “housebound allowance” portion of a Pension payment does not count as “income” for Medicaid purposes.
In 2014, the income limit for Medicaid is set at $2,163, but in many states this can be reduced by medical expenditures or having the income paid into a type of simple trust. The income rules are discussed in much more detail in my book, Medicaid Secrets. see more
Question
Can Mom be denied on her medicaid application if she owns a home but needs to choose to walk away from her mor...
Under federal law, it is only the net equity that counts, i.e., the value of the asset minus the debt owed (20 C.F.R. 416.1201(a)). In any... Under federal law, it is only the net equity that counts, i.e., the value of the asset minus the debt owed (20 C.F.R. 416.1201(a)). In any event the home would be an exempt asset even if she had some equity. In either case, then, this should not affect her Medicaid eligibility. see more
Question
Is financial POA an either-or thing, or do I have to take over everything if it's granted due to incapacity?
Appointing someone as your "agent" under a Power of Attorney extends their authority to that agent and does not replace it. So if... Appointing someone as your "agent" under a Power of Attorney extends their authority to that agent and does not replace it. So if your father signs a DPOA he continues to retain all his powers, but now you have certain enumerated powers, too, as detailed in the POA document.
I would NOT wait too much longer, because if he deteriorates to the point where he no longer understands the purpose of a POA, it will be impossible for him to sign one, leaving you with having to go to court to get such powers (often necessary). Depending on his financial situation, the POA should probably include specific clauses permitting gifting for Medicaid planning purposes; note that store-bought forms (indeed even many attorney-prepared forms) omit these powers, so be sure to work with an attorney who specializes in legal situations of elders (called elder lawyers). see more
I would NOT wait too much longer, because if he deteriorates to the point where he no longer understands the purpose of a POA, it will be impossible for him to sign one, leaving you with having to go to court to get such powers (often necessary). Depending on his financial situation, the POA should probably include specific clauses permitting gifting for Medicaid planning purposes; note that store-bought forms (indeed even many attorney-prepared forms) omit these powers, so be sure to work with an attorney who specializes in legal situations of elders (called elder lawyers). see more
Question
My husband has to have long term Medicaid. When I file my income tax will Medicaid concern that income?
No, the income of each spouse is separate and your income will not be attributed to your husband. Only his own, separate income is counted... No, the income of each spouse is separate and your income will not be attributed to your husband. Only his own, separate income is counted for purposes of his Medicaid eligibility. This is a FEDERAL law so it applies to all 50 states. I have a chapter in my book on how income is divided between husband and wife, and it is frequently possible for the at-home spouse to protect a portion of the nursing home spouse's income, if the at-home spouse's income is below a certain threshold. see more
Question
Can your elder be put out of a nursing home while she is waiting for her house to sell?
The home is an exempt resource so she should be able to apply for Medicaid immediately. Her Social Security and VA will go to the n.h. and... The home is an exempt resource so she should be able to apply for Medicaid immediately. Her Social Security and VA will go to the n.h. and Medicaid will pick up the difference. Once the house is sold, all that money will be countable, so she will be disqualified from Medicaid until she either spends it down by paying the nursing home (private pay) or otherwise protects it by purchasing exempt assets, converting it to a Medicaid annuity, etc. (discussed in my book). Good luck! see more
Question
How will this affect Medicaid eligibility?
If a person who is added to a bank account withdraws money from that account for their own benefit, it is considered a gift to them at the... If a person who is added to a bank account withdraws money from that account for their own benefit, it is considered a gift to them at the time they make the transfer to themselves. If it was not authorized by your parents, then it is an illegal transfer, and your parents should immediately take his name off the account.
If the transfer was with your parents' approval, it is a gift and will cause a Medicaid penalty period should either of them apply within 5 years. see more
If the transfer was with your parents' approval, it is a gift and will cause a Medicaid penalty period should either of them apply within 5 years. see more
Question
Need to move Mom with dementia from CA to TN. Can we transfer our POA for her to brother-in-law in TN?
Pam is correct: One cannot transfer a POA from the person named in the document to someone else, unless the document gave them that power... Pam is correct: One cannot transfer a POA from the person named in the document to someone else, unless the document gave them that power (which would be very unusual). As she said, if your mom is competent to understand the POA and what it does, you can prepare a new POA and have her sign it. see more
Question
What can a spouse keep in SS with pension for admittance into a facility?
As a general rule, all states must follow the federal Medicaid law that says the spouse at home is permitted to retain AT LEAST $1,939,... As a general rule, all states must follow the federal Medicaid law that says the spouse at home is permitted to retain AT LEAST $1,939, which may be increased to $2,931 if financial need can be proved (some states set the minimum at $2,931). see more
Question
Do I need a caregiver agreement between me and my Mom?
Most state Medicaid departments will insist on a written caregiver agreement in order to treat the payments to you as other than a gift... Most state Medicaid departments will insist on a written caregiver agreement in order to treat the payments to you as other than a gift from your mom. The agreement should spell out the amount of payments, frequency, your duties and responsibilities, etc. You should not charge more than the going rate in your area for similar work, otherwise the excess charges will be deemed a gift from your mom. Finally, it's safest to be paid on an ongoing basis (e.g., at the end of each week) vs a lump-sum in advance, because only a few states permit advance lump-sum payments for Medicaid purposes.
Don't forget you have to report the payments as income on your tax return! see more
Don't forget you have to report the payments as income on your tax return! see more
Question
Gifted house to son without life tenancy. What to do now?
It's possible that if there was an "implied understanding" or "implied agreement" between you and your son that he... It's possible that if there was an "implied understanding" or "implied agreement" between you and your son that he would continue to allow you to live in the house for life, at the time you deeded the house to him outright and without any reservation of a life estate, that you now have a "constructive trust" interest in the house for life.
As you can see, this is a very technical legalistic point that only an expert attorney in real estate law can help you with. Thus, I suggest you consult such an attorney for advice about your situation. Hopefully you will be able to stay in your former home. see more
As you can see, this is a very technical legalistic point that only an expert attorney in real estate law can help you with. Thus, I suggest you consult such an attorney for advice about your situation. Hopefully you will be able to stay in your former home. see more
Question
Does Medicaid now look back seven years because of Obamacare?
The short answer is "No," the Medicaid lookback and penalty rules were not affected by the Affordable Care Act... The short answer is "No," the Medicaid lookback and penalty rules were not affected by the Affordable Care Act ("Obamacare"). The lookback period is still 5 years before the date you apply for Medicaid. see more
How to transfer Medicaid from Alabama to Texas?
You can visit the Texas Medicaid website to learn more, here: http://www.hhsc.state.tx.us/medicaid/
You can call the Texas Medicaid hotline toll-free at: 800-252-8263
E-mail inquiries should be sent to: medicaid@hhsc.state.tx.us see more