Joint Assets

Joint Assets

In prior Posts, I have indicated that a large portion of New Jersey Medicaid law has not been affected by The Deficit Reduction Act. However, it is important to realize the treatment of certain issues and the current treatment of such issues. This article has been written with that thought in mind.

Under the Medicaid Catastrophic Coverage Act, New Jersey has accorded special treatment to funds withdrawn from a joint bank account – Medicaid Communication 88-15. That is, funds drawn by another other than the applicant from a joint account were not treated as transfer if both parties had complete access to the account and funds were placed into the account by the applicant prior to the look-back period.

OBRA ’93 employs broad language to treat any reduction in individual’s ownership or control of any joint asset as a transfer. New Jersey now follows OBRA ’93 for all joint assets, including bank accounts (i.e. funds withdrawn by another are subject to a transfer penalty). This is now the law in New Jersey.

To the extent that the funds withdrawn were the property of and contributed by the co-owner, the withdrawal of these funds should not result in the imposition of a penalty.


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 #29

Allocation of Transfer Penalty - When Community Spouse Makes Transfer and Then Enters Nursing Home

Allocation of Transfer Penalty – When Community Spouse Makes
Transfer and Then Enters Nursing Home

Transfers by the spouse of an applicant are considered in determining the Medicaid eligibility of such individual. Under prior law, such transfers would also be considered again in determining eligibility for a community spouse who subsequently was institutionalized. That is, transfers by a community spouse who was subsequently institutionalized resulted in a double penalty. OBRA ’93 (which hasn’t been changed by the current law) requires that a “reasonable methodology” be employed to apportion the period of ineligibility between the applicant and a transferor – spouse who is subsequently institutionalized.

Example: Individual is in nursing home. Transfer of assets by spouse results in a 20-month penalty period for individual. Eight months after the transfer, spouse is institutionalized. The remaining penalty period of 12 months is to be apportioned. Presumably, six months will be allocated to each so that individual’s period of ineligibility due to the transfer will total 14 months.

Keep in mind, that under current law the penalty commences as outlined in Post #15.

Note: If one spouse dies or leaves the institution, the remaining portion of the penalty is allocated to the other spouse.

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 #19