Advantages of Purchasing a Home by Community Spouse Revisited

In Post 11, the advantages of purchasing a home by the community spouse were discussed.

Suppose there are community assets of $400,000.00 and the community spouse is renting a home. The community spouse resource allowance maximum is $109,560.00. The community spouse can protect additional assets by purchasing a home which would be an excludable resource. As indicated by Post 11, the resources of the community spouse are no longer relevant after the applicant receives Medicaid.

Therefore, a viable planning technique would be for the community spouse to temporarily purchase a residence, which could be sold or gifted after the applicant gets Medicaid.

Further, as discussed in Post 33, if the community spouse is working, the community spouse should cease working until after the applicant receives Medicaid.

Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2011, Post 146

Negative Results of Disclaimer by Nursing Home Resident

Although a disclaimer may have estate planning benefits, such an action would be treated as a transfer under the Medicaid rules (see Federal Statute 42 U.S.C. Section 1396p(c) and (e)). The first Statute treats a transfer as any disposition and the second statute requires an affirmative act.

Since a disclaimer is an affirmative act, the period of ineligibility from the disclaimer would run not from the date of the disclaimer but from the date the individual was in the nursing home and down to the appropriate amount ($2,000 or $4,000).

Pursuant to Medicaid Communication 10-02 and 10-06 , reverse half-a-loaf planning will not work in New Jersey. Therefore, the only choice is not to disclaim and to spend the monies on the nursing home. The appropriate planning would be to transfer monies to the appropriate donees who would then use the monies for the benefit of the nursing home resident. Should any monies remain after the 5 year look back period, such funds would be saved for the donees.

Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2011, Post 145

TIAA-CREF and its Effect on Medicaid

Many Medicaid applicants are recipients of a retirement plan known as TIAA-CREF. This is the retirement benefit paid to those working within the college environment.

There are two basic types of retirement benefits. One provides for an irrevocable election of payment of an annuity. The other type of benefit may be in the form of an annuity, but the remaining balance constitutes an available resource.

Therefore, it is incumbent upon counsel to carefully review the available plan. Should the benefit remain an available resource, this has a negative effect on Medicaid eligibility. However, if the benefit is an irrevocable election, the funds must be used to help defray the cost of Medicaid in the manner of a pension or social security.

Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2011, Post 144

Designation of Agent Under a Power of Attorney

The significance of a power of attorney with respect to accessibility has been discussed in Post 54. Another significant aspect of the power of attorney is the designation of the agent. For example, if a husband and wife are adverse in any way, they should not be designated as agent. Similarly, children of the parents may feel that they do not want to serve as agents given a conflict situation.

As discussed in my webinar, Ethical Dilemmas for Elder Law Practitioners, although many conflicts can be waived, the seminal question is whether they should be waived. Therefore, counsel must address the question of representation of the husband and wife when they are adverse. The second issue is the designee of the agent who ideally would not be the spouse or children but should rather be an independent party.

Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2011, Post 143