An
example of protecting assets in light of the Medicaid law may be the
following example. Say that your parent decides that they need a
nursing home immediately and give you their $150,000 in savings.
If the average cost of nursing home care in your area is $5,000 a
month, then the Medicaid law would stipulate that your parent would
not be eligible to receive Medicaid for 30 months (5,000 x 30), which
is the entire time that it would take your parent to spend the
$150,000 in savings.One way that some
people get around this provision in Medicaid law is to give away half
of their money, keeping just enough to pay for their care throughout
those months that they will not be covered. So rather than giving
away the whole amount (or putting it in an irrevocable trust for their
heirs) they give away half of their savings or $75,000. Your parent
now has to pay for their own nursing home care for 15 months, and keep
the other half.
While the Medicaid
law of most states concludes that a person can keep a home and some
personal belongings, the state may claim anything remaining in the
estate after the person dies to recoup what has been spent on their
care in the meantime. Depending upon the states’ Medicaid law, your
parent may be able to protect their home by putting the deed in
someone else's name. Even if your parent lives in the house during
his/her lifetime, it is still out of the reach of state officials and
other creditors. But as mentioned previously, state officials will
look back for 36 months, making it imperative for individuals to plan
in advance.
It's not always
just a matter of abiding by Medicaid law that is important. Also,
your parent needs to consider what kind of nursing home they want to
be in. There is a variety of nursing home facilities, some good, some
not so good, and everything in between. Therefore, if your parent
chooses to give away their assets to go on Medicaid, they should not
be overly zealous about it as they will need money to live on. And,
your parent would be well advised to keep enough money so that they
can apply to a good nursing home as a self paying resident for at
least a period of time. This will give them a much better selection
of nursing homes rather than just taking what they can get.
Also, be well
aware that the Medicaid law is constantly changing. Opportunities to
protect assets are becoming narrower and may eventually disappear.
What is permitted under Medicaid law today may not be permitted
tomorrow.
Some information
from How to Care for Aging Parents by Virginia Morris
Additional Information and
webpage by Paul Susic MA Licensed
Psychologist Ph.D. Candidate
