As an attorney, my clients often share rumors that they hear circulating “on the streets” about all kinds of legal matters. I give them credit for bringing those rumors to me, because it gives me the opportunity to clear them up and gives them the opportunity to get the right advice and do the right thing. Because my practice involves elder law, the most frequent rumors I hear involve Medicaid. They are also the most frustrating. I am amazed at the misinformation that is circulating so recklessly.
The biggest Medicaid rumor my clients have shared with me has to do with what to do if a parent suddenly becomes seriously ill, doesn’t have long-term care insurance, hasn’t done Medicaid advance planning, and needs Medicaid to pay for the home. of permanent elderly care. More than one client has told me that friends and acquaintances have advised them to put all of their parents’ assets in their name because then Medicaid will make sure they own nothing and they can qualify for Medicaid right away.
Not only is it wrong, it is fraught with problems that could subject those in need and their families to penalties, disqualification, or worse, criminal charges.
Whether a sick elder immediately qualifies for Medicaid to pay for nursing home care depends on whether he made progress in Medicaid planning or whether his current financial status qualifies him from the beginning. The truly destitute should have no qualification problems. It is the lower middle class, those with modest assets who are trying not to lose completely, especially if they have a good spouse or children, who face a more challenging task to qualify for.
Congress has created methods by which those who are not destitute but not wealthy can attempt to protect some or all of their assets to qualify. At best, someone planning ahead can create a Medicaid-qualifying trust, transfer all of your assets to the trust, and wait for the five-year “rollback” period. When the person can show that they have not had any assets for at least five years (because the trustee of the trust owns their property and the Medicaid applicant cannot be the trustee), they must qualify for Medicaid.
It is at worst, when an older person does not plan at all, or what we in the industry call “the Medicaid crisis case,” that problems arise. And this is where those rumors abound. Because Medicaid looks back five years at a person’s financial history to determine what they own (ed) and where it went, any transfer of their assets to someone else’s name without adequate compensation for the transfer will award the Medicaid applicant has a penalty period, which means they will not qualify for coverage for a certain period of time, based on a set formula.
Tea worse What a child can do is transfer his parents’ assets out of the father’s name thinking that Medicaid will not know, or not report all assets thinking that Medicaid will not find them, which is equivalent to defrauding Medicaid and could subject to that person to a criminal offense. charges. (Different rules apply to spouses). The fact is, Medicaid conducts a thorough review of each applicant’s financial background, reference and cross-reference documents, checks all financial transactions, bank accounts, and other assets, and will determine if the money has been transferred. . By the time they find out, it will be too late for the older person to do anything to reverse those transfers and they will be disqualified from receiving Medicaid benefits for at least a period of time.
Congress has authorized various methods by which even “crisis” cases can protect some of your assets. Some examples include purchasing an irrevocable funeral trust, investing in certain home improvements, making gifts with repayment of promissory notes, and entering into personal service contracts with family members. The only way to know if you or your loved one can protect some or all of your assets is to consult an elderly attorney who specializes in Medicaid planning.
As my father used to say: “Believe half of what you see and nothing of what you hear.” This is a good policy when it comes to rumors about Medicaid. Get the right advice so you can get the best for your loved ones.