Creativity Required in Elder Law Planning

Very often a situation will arise where it appears that Medicaid eligibility is lost. Often, creative thinking can preserve eligibility.

I can think of two very clear examples which will emphasize this point.

There is a theory in Medicaid known as the "stupid kid" defense. Assume a child has a power of attorney for a single parent and has $3,000 and the parent has a $2,000 liability. Further assume the child neglects to pay the liability so that the amount of resources at the appropriate time is $3,000. Janice Chapin of Central Jersey Legal Services has been successful in arguing what is known as the "stupid kid" defense. That is, Medicaid has allowed eligibility on the basis that the parent should not suffer neglect of the "stupid kid".

Another example comes to mind. Approximately 20 years ago, Hunterdon County Legal Services had a matter where the only applicant's resource was corporate stock and a buy-sell agreement. Such an agreement often provides for the other shareholders to have an option to buy and that upon the death of the shareholder, the purchase can be mandatory. At an administrative hearing, it was held that such stock was not an available resource since it was subject to the buy-sell agreement.

Like in all Medicaid situations, there is no guarantee that these approaches will work with any County board. However, these arguments have worked in the past and creativity should be the key note planning by any Elder Law attorney.

Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© September 2011, Post 161