Caretaker agreements have been discussed in Posts 17 and 52. Basically, the regulations provide that if an applicant transfers funds to a child or relative if such transfer is pursuant to a pre-existing agreement, the presumption of a transfer is rebutted. However, careful examination of the language indicates that such agreement may not be necessary. The regulations state that a transfer of assets by the applicant to a friend or relative “may be rebutted by the presentation of credible documentary evidence preexisting the delivery of the care or services.”
The word “may” is to be stressed. My feeling is that if the fact situation clearly indicates that a transfer of monies compensating a friend or relative for past services is obvious, a pre-existing agreement should not be provided.
For example, if the applicant during the look-back period has no funds and needs medicine to keep alive, monies expended by a friend on such medicine with the check indicating that it is a loan should not require a caretaker agreement. Similarly, if a dependent relative (see Post 14) resides in the future applicant’s home, a portion of any expenditures by the dependent relative should be treated as reimbursable.
Although a caretaker agreement should be drafted, the necessity for such may be lessened, particularly if the parties are aware that the applicant will be receiving an inheritance. That is, the child or friend made expenditures on behalf of the applicant with the anticipation of a reimbursement from the applicant.
The above ideas are merely suggestions as to arguments that can be made if a caretaker agreement has been neglected. Obviously, the preparation of such agreement should be a standard course of conduct.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2009, Post 71
Wednesday, March 24, 2010
Wednesday, March 17, 2010
The Loss of Medicaid Eligibility
The rules of Medicaid eligibility have been discussed in Post 7 and throughout the various postings provided. That is, the individual must have less than $2,000 (or $4,000 if assets are over the income cap of $2,022).
However, after eligibility, the Medicaid recipient (or family) must carefully monitor the individual’s resources to ensure continuing eligibility. That is, for the recipient, the first day of each month must show resources less than $2,000. Situations to be considered include, but are not limited to, the following:
1. The cash value of insurance with a face value in excess of $1,500 is a resource. I recently submitted an application for which the individual had such a policy, but still qualified for Medicaid since the cash value was so minimal and the bank account did not put total resources over $2,000. However, any remaining cash value not surrendered is to be considered in total resources. Therefore, surrendering the policy make sense even if the cash value doesn’t immediately disqualify you from Medicaid if other resources are considered.
2. Medicaid allocates $35.00 a month to a Medicaid recipient. This number can build up over time and has to be reviewed periodically.
3. Presumably, the recipient maintains a bank account and that is also a resource. Avoiding any problems with pension and/or social security is discussed in Post 1.
4. Monies inherited will eventually cause disqualification. The effect of inheritance by the Medicaid recipient is discussed in Post 28.
These types of issues should not be factors with respect to the community spouse resource allowance. As indicated by Post 13, the community spouse is not limited to $109,560 (for the year 2009) after the applicant receives Medicaid. This is to be distinguished from the requirement for the applicant where the resource allowance must be kept at $2,000 or less on the first day of each month throughout eligibility. Two typical examples of the community spouse rule have been presented in the materials. For example, in the real estate planning ideas presented in Post 11, if the primary residence is in the name of the community spouse, the closing on the sale of property in the sole name of the community spouse should be after the date of the applicant’s eligibility. Similarly, if the community spouse is the beneficiary of an estate, the mere fact of being a beneficiary does not cause the inheritance to be a resource as such is treated as an “inaccessible resource.” However, if the monies are distributed before the date of applicant’s eligibility, the inheritance will be treated as part of the “spousal pot,” and, therefore, the applicant will not qualify.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2009, Post 70
However, after eligibility, the Medicaid recipient (or family) must carefully monitor the individual’s resources to ensure continuing eligibility. That is, for the recipient, the first day of each month must show resources less than $2,000. Situations to be considered include, but are not limited to, the following:
1. The cash value of insurance with a face value in excess of $1,500 is a resource. I recently submitted an application for which the individual had such a policy, but still qualified for Medicaid since the cash value was so minimal and the bank account did not put total resources over $2,000. However, any remaining cash value not surrendered is to be considered in total resources. Therefore, surrendering the policy make sense even if the cash value doesn’t immediately disqualify you from Medicaid if other resources are considered.
2. Medicaid allocates $35.00 a month to a Medicaid recipient. This number can build up over time and has to be reviewed periodically.
3. Presumably, the recipient maintains a bank account and that is also a resource. Avoiding any problems with pension and/or social security is discussed in Post 1.
4. Monies inherited will eventually cause disqualification. The effect of inheritance by the Medicaid recipient is discussed in Post 28.
These types of issues should not be factors with respect to the community spouse resource allowance. As indicated by Post 13, the community spouse is not limited to $109,560 (for the year 2009) after the applicant receives Medicaid. This is to be distinguished from the requirement for the applicant where the resource allowance must be kept at $2,000 or less on the first day of each month throughout eligibility. Two typical examples of the community spouse rule have been presented in the materials. For example, in the real estate planning ideas presented in Post 11, if the primary residence is in the name of the community spouse, the closing on the sale of property in the sole name of the community spouse should be after the date of the applicant’s eligibility. Similarly, if the community spouse is the beneficiary of an estate, the mere fact of being a beneficiary does not cause the inheritance to be a resource as such is treated as an “inaccessible resource.” However, if the monies are distributed before the date of applicant’s eligibility, the inheritance will be treated as part of the “spousal pot,” and, therefore, the applicant will not qualify.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2009, Post 70
Friday, March 12, 2010
Additional Real Estate Planning Idea for Married Couple
In Post 11, it was discussed that if a couple are renting, the purchase of a home by the community spouse would be a protected asset and expedite Medicaid eligibility. I believe this is a significant planning technique and this post discusses the approach in greater detail. The key rule to remember is that the home constitutes exempt property if resided in by the applicant, the community spouse or both. This article addresses ownership of home by the community spouse. Generally, if a couple is renting , the new home should be purchased solely in the name of the community spouse and resided in at least until after the husband qualifies for Medicaid. That is, after determination of eligibility for Medicaid, the resources of the community spouse are no longer deemed available to the nursing home resident. However, if the home were sold prior to Medicaid, the monies would be part of the spousal “pot” and Medicaid eligibility would be denied or lost.
The key to this planning technique is also to protect the community spouse resource allowance.
The community spouse resource allowance is determined “as of” the date of institutionalization which is the date of continuous placement in a hospital or nursing home. The key to maximizing resources is that, if institutionalization is imminent, purchase the home after institutionalization so as to maximize asset protection. That is, prior to institutionalization we are dealing with cash.
For example, if there is $300,000 in resources at the date of the “snapshot," the community spouse resource allowance would be $109,560. The balance of the monies could be used by the community spouse to purchase a home. That is, the monies not allocated to community spouse resource allowance need not be allocated to nursing home costs. It is a common misconception that resources that are not part of the protected amount must be expended on nursing home costs. There is no such requirement.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2009, Post 69
The key to this planning technique is also to protect the community spouse resource allowance.
The community spouse resource allowance is determined “as of” the date of institutionalization which is the date of continuous placement in a hospital or nursing home. The key to maximizing resources is that, if institutionalization is imminent, purchase the home after institutionalization so as to maximize asset protection. That is, prior to institutionalization we are dealing with cash.
For example, if there is $300,000 in resources at the date of the “snapshot," the community spouse resource allowance would be $109,560. The balance of the monies could be used by the community spouse to purchase a home. That is, the monies not allocated to community spouse resource allowance need not be allocated to nursing home costs. It is a common misconception that resources that are not part of the protected amount must be expended on nursing home costs. There is no such requirement.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2009, Post 69
Methods of Payment of Nursing Home Costs
There are several methods by which a nursing home can be reimbursed for the stay of an individual, some of which are temporary and some of which are permanent. However, it is necessary to keep all of these in mind in projecting the date of eligibility.
Firstly, other than the various financial issues in obtaining a Medicaid eligibility letter, a necessary element of Medicaid eligibility is to obtain a PAS for the applicant. This is an examination by the county nurse which will be given almost immediately if a potential applicant is in a hospital. Otherwise, the family is at the mercy of the schedule of the nurses who often cover several counties. Financial eligibility without a PAS will result in eligibility being delayed until the PAS is obtained.
The methods of payment of a nursing home include Medicare (for a limited period of time), long-term care insurance and private pay.
There is a misconception that Medicare will pay for a long-term institutionalization. This is not the case. Medicare will pay for a limited stay at the nursing home if the following requirements have been met:
1. The individual has resided at a hospital for at least three days.
2. Medicare will make full payment for 20 days if an individual requires skilled nursing or rehabilitation and payment is made so long as sufficient progress is made by the applicant. Medicare will also pay for some or all of the next 80 days with a co-pay that is often covered by the individual’s Medigap insurance. The family must carefully monitor the progress of the potential applicant and the thinking of the nursing home. The nursing home often gives limited notice as to the time Medicare payment ceases. At this time, the family must make the decision as to whether the individual remains in the nursing home or returns home.
If an individual remains in a nursing home, the rules of Medicaid discussed in the various Medicaid postings become applicable.
Many nursing homes require private pay for a guaranteed period of time. Although this requirement is illegal, it is part of the Medicaid game and the family should make initial inquiry as to the policy of any given nursing home.
Also, upon the expiration of Medicare coverage, the family will be presented with a nursing home application, including the key document which is the agreement. Consulting an attorney regarding the terms of the agreement is advisable.
If an individual anticipates purchasing long-term care insurance, an expert should be consulted. The permutations of the type of policy are virtually infinite. Some of the areas that are to be addressed include care at home, increase with the C.P.I., time period for coverage (that is, set number of years or lifetime), waiting period (period before payments commence), etc. I intend to have an expert write an article for this blog discussing long-term insurance in detail.
There are basically two reasons why an individual would purchase long-term care insurance. Usually, the insurance is purchased because the individual or individuals are aware of the intricacies of Medicaid and desire to have monies to avoid such process. However, such insurance can be purchased for estate planning purposes. That is, a wealthy individual might not want a diminution of assets caused by nursing home costs and the insurance would avoid or at least ameliorate that possibility.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2009, Post 68
Firstly, other than the various financial issues in obtaining a Medicaid eligibility letter, a necessary element of Medicaid eligibility is to obtain a PAS for the applicant. This is an examination by the county nurse which will be given almost immediately if a potential applicant is in a hospital. Otherwise, the family is at the mercy of the schedule of the nurses who often cover several counties. Financial eligibility without a PAS will result in eligibility being delayed until the PAS is obtained.
The methods of payment of a nursing home include Medicare (for a limited period of time), long-term care insurance and private pay.
There is a misconception that Medicare will pay for a long-term institutionalization. This is not the case. Medicare will pay for a limited stay at the nursing home if the following requirements have been met:
1. The individual has resided at a hospital for at least three days.
2. Medicare will make full payment for 20 days if an individual requires skilled nursing or rehabilitation and payment is made so long as sufficient progress is made by the applicant. Medicare will also pay for some or all of the next 80 days with a co-pay that is often covered by the individual’s Medigap insurance. The family must carefully monitor the progress of the potential applicant and the thinking of the nursing home. The nursing home often gives limited notice as to the time Medicare payment ceases. At this time, the family must make the decision as to whether the individual remains in the nursing home or returns home.
If an individual remains in a nursing home, the rules of Medicaid discussed in the various Medicaid postings become applicable.
Many nursing homes require private pay for a guaranteed period of time. Although this requirement is illegal, it is part of the Medicaid game and the family should make initial inquiry as to the policy of any given nursing home.
Also, upon the expiration of Medicare coverage, the family will be presented with a nursing home application, including the key document which is the agreement. Consulting an attorney regarding the terms of the agreement is advisable.
If an individual anticipates purchasing long-term care insurance, an expert should be consulted. The permutations of the type of policy are virtually infinite. Some of the areas that are to be addressed include care at home, increase with the C.P.I., time period for coverage (that is, set number of years or lifetime), waiting period (period before payments commence), etc. I intend to have an expert write an article for this blog discussing long-term insurance in detail.
There are basically two reasons why an individual would purchase long-term care insurance. Usually, the insurance is purchased because the individual or individuals are aware of the intricacies of Medicaid and desire to have monies to avoid such process. However, such insurance can be purchased for estate planning purposes. That is, a wealthy individual might not want a diminution of assets caused by nursing home costs and the insurance would avoid or at least ameliorate that possibility.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2009, Post 68
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