Unique Solution to Transfer by Applicant Prior to Representation

Transfers by an applicant after the Deficit Reduction Act present unique problems. (See Post 15). Various posts have discussed partial or complete solutions to such problems such as use of the monies for the applicant or return of the monies. However, any monies returned become resources of the applicant.

I was recently presented with a problem which again brought to my attention the significance of a caregiver’s agreement.

Assume the following facts:

1. Transfers by an applicant without the advice of counsel.
2. Intent to qualify for Medicaid in the near future.

There was a pre-existing care agreement and the applicant had substantial liabilities. I resolved this problem in the following manner:

1. The child returns the money to the potential applicant to undo the penalty.
2. Parent, depending upon the situation, can use the monies to pay debts, make payments pursuant to a pre-existing care agreement or spenddown either prior to entrance to a nursing home or after admission.

Pre-existing transfers require creativity for solutions. For example, in another matter, a sibling of the donee loaned monies to the donee who reimbursed the applicant who, in this case, had substantial debts and the monies reimbursed were immediately used for the spenddown. The children arranged between themselves for repayment of the loan.

Another common situation would be prior transfers and the parent having a substantial liability due to a reverse mortgage. Similarly, return of the monies would undo the penalty and the monies could be spent down immediately to pay the debt.

This discussion again stresses the point of reviewing all the facts and see if there is a possible solution to resolve what initially appears to be an unresolveable problem (see also Post 18).

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 80