Property Owned Jointly With Other Than Spouse

Property Owned Jointly With Other Than Spouse

Applicant may own property jointly with a person other than a spouse. Typical events that give rise to joint ownership would be inheritance or acquisition of such joint property.

Joint property with right of survivorship with a caretaker child has been discussed in Post 23.

Generally, the two types of joint tenancy are joint ownership with right of survivorship (interest passes to survivor by operation of law upon death of co-owner) and tenancy in common (interest passes under person’s will). The administrative regulations provide that co-ownership will not preclude eligibility if the property cannot be sold because of the refusal of the co-owner to liquidate and is deemed to be an inaccessible resource. (N.J.A.C. 10:71-4.4(b)6.)

Therefore, any type of joint ownership will not preclude eligibility. However, as discussed in Post 23, the three inter-related goals of Medicaid planning are to establish Medicaid eligibility, avoid disqualification after eligibility and to avoid the Medicaid lien after the death of the recipient of benefits.

Although a joint tenancy or a tenancy in common will not affect eligibility, the other goals of avoiding disqualification after eligibility and avoidance of the lien after the death of the recipient of benefits are not accomplished by co-ownership. With respect to disqualification after eligibility, if the owner of a survivor interest predeceases a Medicaid recipient, the decedent’s interest will pass by operation of law to the recipient and will then constitute an “available resource.” Therefore, eligibility would be lost. If the recipient predeceased, recipient’s one-half interest would be subject to the Medicaid lien.

With respect to tenancy in common, the death of the co-tenant would sever the ownership of the property so that it would no longer be held jointly and the applicant’s interest would disqualify the applicant from Medicaid. If the applicant predeceased, the applicant’s one-half interest in the tenancy in common would be subject to the Medicaid lien.

A sale of either type of tenancy would result in one-half the cash proceeds passing to a Medicaid recipient, which would then disqualify the individual from Medicaid.

As in prior posts (for example Post 6), I have used the word “protected transferee” to mean an individual who can be gifted an applicant’s home without transfer penalty. Another category of protected transferee is a sibling (i) who has an equity interest in the home; and (ii) who was residing in the home for at least one year prior to the date of institutionalization. The situation usually arises when sibling is joint owner of a two-family dwelling. The need to avoid the Medicaid lien is not as compelling in this situation as in the circumstance of joint ownership with a child.

An interesting point regarding any form of joint ownership discussed in this article is the concept that a Medicaid recipient must use recurring monies to defray Medicaid’s outlay (i.e. the Medicaid reimbursement rate). Included in this contribution is one-half the property owned with the other individual. For these purposes, hypothetical deductions such as depreciation are not considered. The contribution to be made by the Medicaid recipient (assuming the house is rented) is one-half the net rental proceeds.

Conclusion: Although ownership of property with another will not preclude Medicaid eligibility, it can result in disqualification from eligibility or be subject to the Medicaid lien. Some, but not all, of those results have been discussed above.

Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.


© May 2009, Post #35

Caretaker Child Revisited

Caretaker Child Revisited

In a prior Post 6, I discussed in some detail the rationale for preparing a power of attorney for a potential applicant that allows the residence to be transferred to the child who provided care (i.e. “protected transferee”) if appropriate for Medicaid planning purposes. However, it is important to discuss the type of evidence to be adduced at the County Board of Social Services to influence the Board to make a decision that the child provided the requisite care so that the transfer can be made at that time either by the applicant (if competent) or under the power of attorney if applicant is then incompetent. I have found that two documents provided to the Board are sufficient for establishing the requisite care for the two-year period and the fact that such care permitted the individual to reside at home rather than go into a nursing home.

Firstly, an affidavit prepared by the child discussing the care provided (with any necessary documentation) is most helpful. In the simplest situation, I had a case in which a nurse of a prominent nursing home retired to take care of her mother at home. Obviously this is not the typical case but is an extreme example. The usual case involves a child living in the parent’s home who is working and provided certain elements of care. To prepare a proper affidavit inquiry should be made with respect to the following areas: whether the child worked near the residence of the applicant, to what extent did the child provide medicine which the applicant could not self-administer, whether the child was available during the day to immediately go home and take care of the potential applicant if necessary, how much time did the child spend with the potential applicant during non-working hours, to what extent the child would go on vacation (going on vacation is not fatal since I believe that intermittent care by another would not ruin the “protected transferee” status), to what extent the child helped the potential applicant with basic physical care needs such as cleaning, etc., the child’s role in providing transportation and coordination of care with the parent’s physicians, did child directly provide any basic medical care on a regular basis such as taking blood pressure. The list of such inquiries is infinite but the key is to show that but for the care of the child, the parent would need to go into a nursing home.

Secondly, it is recommended that a letter from the potential applicant’s physician stating to the best of his/her knowledge the child provided the necessary care to allow the potential applicant to remain at home. This letter should be brief and to the point. In my experience, I have not requested an affidavit from a physician since I feel it would be inappropriate.

Such an approach should get the desired result (transfer of home to child).


Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.


© May 2009, Post #34