Minimum Monthly Needs Allowance (m.m.n.a.)
Old and new laws allow post-eligibility income (pension, social security) to be shifted to community spouse. This is based upon theory that a spouse living in family residence should receive a certain minimum amount of income to pay for housing or "shelter" costs. Argument has been made on behalf of community spouse that principal generating the income needed (reasonable rate of return) should be shifted from applicant to spouse (in essence, increasing the community spouse resource allowance). The new law provides for the "income first" rule which requires that applicant's income be shifted first to make up the m.m.n.a., and if more income is needed (unlikely), then assets can be shifted.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
Copyright October 2009, Post 56
Friday, October 16, 2009
Tuesday, October 6, 2009
The Medicaid Lien
The Medicaid Lien
As discussed in prior posts, Medicaid planning by counsel must consider three interrelated goals: to establish Medicaid eligibility, to avoid disqualification after eligibility and to avoid the Medicaid lien after the death of the recipient. The Medicaid lien is discussed in N.J.A.C. 49:14.1. The lien is applicable to an individual’s “estate,” which is basically defined as real or personal property and other assets in which the Medicaid beneficiary had any legal title or interest at the time of death to the extent of that interest, including assets conveyed to a survivor, heir or assign of the beneficiary through joint tenancy, tenancy in common, survivorship, life estate, living trust or other arrangement . . . The regulation goes on to discuss certain types of trusts which are also subject to the lien.
There are many issues that could be discussed with regard to the coverage and the language of the lien statute, which are beyond the scope of this article.
Basically, the initial inquiry should be the factors that give rise to the existence of the lien. Firstly, in order for there to be a lien, a deceased individual must have an asset that did not preclude Medicaid eligibility. Secondly, such asset must come within the lien statute.
Typical examples of such assets have been discussed in prior postings, which would include both a discussion of the lien and, in certain circumstances, how to avoid the applicability of the lien:
1. Of course, the most obvious example of assets in one’s “estate” for lien purposes is joint assets particularly joint tenancies with right of survivorship and tenancies in common. For Medicaid purposes, such assets are treated as “inaccessible resources.” See Post 35 for a more detailed discussion of joint assets.
2. Property Owned By Applicant Residing With Caretaker Child (Post 6).
3. Although not discussed in great detail, the transfer of the home by a married couple to another would temporarily take the property out of the lien statute. Basically, the lien would not apply upon the death of the first spouse since property passing to a spouse is not subject to the lien. Medicaid would apply to the lien to such property upon the death of the second spouse.
4. The lien does not apply to the estate of deceased beneficiary if a family member of the deceased beneficiary had continuously resided in the home of the beneficiary (see Post 14 relating to Dependent Relative).
5. Post 23 discusses the transfer of a home owned jointly by an individual to a Protected Transferee (i.e. caretaker child) as removing the home from the lien as one of the benefits.
6. Post 42, which discusses assets transferred to a disabled child, which is an exempt transfer.
7. The most significant exemption from the lien statute, which previously had been allowed as administrative decision is incorporated in the regulations which state “a life estate in which the beneficiary held an interest during his or her lifetime.”
There are an infinite number of issues relating to the lien and the applicability of the lien which could be discussed. Of particular significance is the applicability of the lien to certain types of testamentary trusts. The above discussion is intended to familiarize the reader with the significance of the lien and some of the salient issues.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© October 2009, Post 55
As discussed in prior posts, Medicaid planning by counsel must consider three interrelated goals: to establish Medicaid eligibility, to avoid disqualification after eligibility and to avoid the Medicaid lien after the death of the recipient. The Medicaid lien is discussed in N.J.A.C. 49:14.1. The lien is applicable to an individual’s “estate,” which is basically defined as real or personal property and other assets in which the Medicaid beneficiary had any legal title or interest at the time of death to the extent of that interest, including assets conveyed to a survivor, heir or assign of the beneficiary through joint tenancy, tenancy in common, survivorship, life estate, living trust or other arrangement . . . The regulation goes on to discuss certain types of trusts which are also subject to the lien.
There are many issues that could be discussed with regard to the coverage and the language of the lien statute, which are beyond the scope of this article.
Basically, the initial inquiry should be the factors that give rise to the existence of the lien. Firstly, in order for there to be a lien, a deceased individual must have an asset that did not preclude Medicaid eligibility. Secondly, such asset must come within the lien statute.
Typical examples of such assets have been discussed in prior postings, which would include both a discussion of the lien and, in certain circumstances, how to avoid the applicability of the lien:
1. Of course, the most obvious example of assets in one’s “estate” for lien purposes is joint assets particularly joint tenancies with right of survivorship and tenancies in common. For Medicaid purposes, such assets are treated as “inaccessible resources.” See Post 35 for a more detailed discussion of joint assets.
2. Property Owned By Applicant Residing With Caretaker Child (Post 6).
3. Although not discussed in great detail, the transfer of the home by a married couple to another would temporarily take the property out of the lien statute. Basically, the lien would not apply upon the death of the first spouse since property passing to a spouse is not subject to the lien. Medicaid would apply to the lien to such property upon the death of the second spouse.
4. The lien does not apply to the estate of deceased beneficiary if a family member of the deceased beneficiary had continuously resided in the home of the beneficiary (see Post 14 relating to Dependent Relative).
5. Post 23 discusses the transfer of a home owned jointly by an individual to a Protected Transferee (i.e. caretaker child) as removing the home from the lien as one of the benefits.
6. Post 42, which discusses assets transferred to a disabled child, which is an exempt transfer.
7. The most significant exemption from the lien statute, which previously had been allowed as administrative decision is incorporated in the regulations which state “a life estate in which the beneficiary held an interest during his or her lifetime.”
There are an infinite number of issues relating to the lien and the applicability of the lien which could be discussed. Of particular significance is the applicability of the lien to certain types of testamentary trusts. The above discussion is intended to familiarize the reader with the significance of the lien and some of the salient issues.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© October 2009, Post 55
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