The Medicaid Lien
As discussed in prior posts, Medicaid planning by counsel must consider three interrelated goals: to establish Medicaid eligibility, to avoid disqualification after eligibility and to avoid the Medicaid lien after the death of the recipient. The Medicaid lien is discussed in N.J.A.C. 49:14.1. The lien is applicable to an individual’s “estate,” which is basically defined as real or personal property and other assets in which the Medicaid beneficiary had any legal title or interest at the time of death to the extent of that interest, including assets conveyed to a survivor, heir or assign of the beneficiary through joint tenancy, tenancy in common, survivorship, life estate, living trust or other arrangement . . . The regulation goes on to discuss certain types of trusts which are also subject to the lien.
There are many issues that could be discussed with regard to the coverage and the language of the lien statute, which are beyond the scope of this article.
Basically, the initial inquiry should be the factors that give rise to the existence of the lien. Firstly, in order for there to be a lien, a deceased individual must have an asset that did not preclude Medicaid eligibility. Secondly, such asset must come within the lien statute.
Typical examples of such assets have been discussed in prior postings, which would include both a discussion of the lien and, in certain circumstances, how to avoid the applicability of the lien:
1. Of course, the most obvious example of assets in one’s “estate” for lien purposes is joint assets particularly joint tenancies with right of survivorship and tenancies in common. For Medicaid purposes, such assets are treated as “inaccessible resources.” See Post 35 for a more detailed discussion of joint assets.
2. Property Owned By Applicant Residing With Caretaker Child (Post 6).
3. Although not discussed in great detail, the transfer of the home by a married couple to another would temporarily take the property out of the lien statute. Basically, the lien would not apply upon the death of the first spouse since property passing to a spouse is not subject to the lien. Medicaid would apply to the lien to such property upon the death of the second spouse.
4. The lien does not apply to the estate of deceased beneficiary if a family member of the deceased beneficiary had continuously resided in the home of the beneficiary (see Post 14 relating to Dependent Relative).
5. Post 23 discusses the transfer of a home owned jointly by an individual to a Protected Transferee (i.e. caretaker child) as removing the home from the lien as one of the benefits.
6. Post 42, which discusses assets transferred to a disabled child, which is an exempt transfer.
7. The most significant exemption from the lien statute, which previously had been allowed as administrative decision is incorporated in the regulations which state “a life estate in which the beneficiary held an interest during his or her lifetime.”
There are an infinite number of issues relating to the lien and the applicability of the lien which could be discussed. Of particular significance is the applicability of the lien to certain types of testamentary trusts. The above discussion is intended to familiarize the reader with the significance of the lien and some of the salient issues.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© October 2009, Post 55
Showing posts with label Caretaker Child. Show all posts
Showing posts with label Caretaker Child. Show all posts
Tuesday, October 6, 2009
Monday, June 8, 2009
Caretaker Child - Practical Aspects
Caretaker Child – Practical Aspects
Prior posts have addressed mainly the rules and theoretical basis for various aspects of Medicaid planning. The next several articles will deal with practical applications of some of the aforementioned rules.
Suppose Mrs. Smith has a home, is competent, but is also a nursing home candidate. Susan, her daughter, has her own home and is willing to have Mrs. Smith move in and make improvements and/or expansions to her home to accommodate her mother.
The various posts (see Posts 6, 23)) that have been discussed are particularly applicable in this situation.
The plan would be for the daughter to make the necessary improvements and/or expansions on her home, Mrs. Smith would sell her home and move into Susan’s home. Prior to moving in there would be a caretaker agreement that would provide for the services and living arrangements to be provided by Susan in exchange for reimbursement by Mrs. Smith which would be set forth in a caretaker agreement.
Such an approach would not only save the value of the house of the family by way of payment to Susan, but would allow the mother to reside with her family and have care rather than live in a nursing home.
As indicated in Post 17, it is absolutely necessary that there be a third party valuation which sets forth the amount of payments to be made by Mrs. Smith. Such payments must be at the prevailing rate in the community. Any payments by Mrs. Smith in excess of that would be treated as a transfer.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© June 2009, Post #40
Prior posts have addressed mainly the rules and theoretical basis for various aspects of Medicaid planning. The next several articles will deal with practical applications of some of the aforementioned rules.
Suppose Mrs. Smith has a home, is competent, but is also a nursing home candidate. Susan, her daughter, has her own home and is willing to have Mrs. Smith move in and make improvements and/or expansions to her home to accommodate her mother.
The various posts (see Posts 6, 23)) that have been discussed are particularly applicable in this situation.
The plan would be for the daughter to make the necessary improvements and/or expansions on her home, Mrs. Smith would sell her home and move into Susan’s home. Prior to moving in there would be a caretaker agreement that would provide for the services and living arrangements to be provided by Susan in exchange for reimbursement by Mrs. Smith which would be set forth in a caretaker agreement.
Such an approach would not only save the value of the house of the family by way of payment to Susan, but would allow the mother to reside with her family and have care rather than live in a nursing home.
As indicated in Post 17, it is absolutely necessary that there be a third party valuation which sets forth the amount of payments to be made by Mrs. Smith. Such payments must be at the prevailing rate in the community. Any payments by Mrs. Smith in excess of that would be treated as a transfer.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© June 2009, Post #40
Tuesday, May 26, 2009
Transfer of Home to Caretaker Child - Revisited
Transfer of Home to Caretaker Child - Revisited
Post 6 stresses that property owned by applicant residing with a caretaker child is to be transferred at time of application for Medicaid. The article suggests that a current power of attorney be drafted so that if the applicant is incompetent at the time of application, a power of attorney can be used to transfer the residence to the caretaker child.
This is an example of tailoring the power of attorney for a client in an elder law situation.
That is, the power of attorney should be provide that in the event an applicant is in a nursing home and an application for Medicaid is submitted, approval by the Medicaid authorities that the child has provided the requisite care for two years is necessary before the property is transferred.
If the applicant is incompetent at the time, the power of attorney can accomplish this result.
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 #37
Post 6 stresses that property owned by applicant residing with a caretaker child is to be transferred at time of application for Medicaid. The article suggests that a current power of attorney be drafted so that if the applicant is incompetent at the time of application, a power of attorney can be used to transfer the residence to the caretaker child.
This is an example of tailoring the power of attorney for a client in an elder law situation.
That is, the power of attorney should be provide that in the event an applicant is in a nursing home and an application for Medicaid is submitted, approval by the Medicaid authorities that the child has provided the requisite care for two years is necessary before the property is transferred.
If the applicant is incompetent at the time, the power of attorney can accomplish this result.
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 #37
Monday, May 11, 2009
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
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
Wednesday, April 8, 2009
In Determining Eligibility, All Rules Must Be Considered
In Determining Eligibility, All Rules Must Be Considered
I recently had a fact situation which required an understanding of several similar rules, only one of which applied.
Facts: Medicaid applicant lived with his disabled sister through the time of application. Applicant had discussed Medicaid eligibility with several attorneys and was advised that the house had to be sold. The sections reviewed by the attorneys and determined to be non-applicable include:
1. The exemption for transfers to a disabled child (Post 42). Child clearly relates to a child of the applicant and would not apply to his sister.
2. Post 6 refers to property owned by applicant residing with caretaker child. Such a caretaker child for purposes of these articles has been referred to a “protected transferee.” Another category of protected transferee is a sibling who has an equity interest in the home and who is residing in the home for at least one year prior to institutionalization. This alternative was also reviewed, but is not applicable since the sibling did not have an interest in the home. Creating an interest in the home for purposes of compliance with the statute would not work since this would result in a transfer. Generally, a sibling has an interest in a home with an applicant either through inheritance or purchase rather than a transfer by the applicant to the sibling of a partial interest.
The client and family discussed the above with me and were of the opinion that within a reasonable time after institutionalization, the house would have to be sold and the individual would have to use the proceeds on nursing home costs. I discussed with them Post 14 which is designated “The Significance of Dependent Relative Residing in the Home with Applicant.” That is, the person in the home was neither a disabled child nor a sister with an equity interest, but the home was still exempt based upon Program Instruction No. 85-8-9, an old Medicaid communication, which requires dependents of a relative rather than the issues perused.
The importance of this situation is that all possibilities must be considered in advising a client regarding eligibility and that many occasions require authority not normally needed in the Medicaid eligibility process. Creativity is especially necessary when dealing with the home. With respect to the home and real property, see Posts 6, 11, 14, 32, 34, 35, 36, 37, 38, 41, 42, and 52.
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 #22
I recently had a fact situation which required an understanding of several similar rules, only one of which applied.
Facts: Medicaid applicant lived with his disabled sister through the time of application. Applicant had discussed Medicaid eligibility with several attorneys and was advised that the house had to be sold. The sections reviewed by the attorneys and determined to be non-applicable include:
1. The exemption for transfers to a disabled child (Post 42). Child clearly relates to a child of the applicant and would not apply to his sister.
2. Post 6 refers to property owned by applicant residing with caretaker child. Such a caretaker child for purposes of these articles has been referred to a “protected transferee.” Another category of protected transferee is a sibling who has an equity interest in the home and who is residing in the home for at least one year prior to institutionalization. This alternative was also reviewed, but is not applicable since the sibling did not have an interest in the home. Creating an interest in the home for purposes of compliance with the statute would not work since this would result in a transfer. Generally, a sibling has an interest in a home with an applicant either through inheritance or purchase rather than a transfer by the applicant to the sibling of a partial interest.
The client and family discussed the above with me and were of the opinion that within a reasonable time after institutionalization, the house would have to be sold and the individual would have to use the proceeds on nursing home costs. I discussed with them Post 14 which is designated “The Significance of Dependent Relative Residing in the Home with Applicant.” That is, the person in the home was neither a disabled child nor a sister with an equity interest, but the home was still exempt based upon Program Instruction No. 85-8-9, an old Medicaid communication, which requires dependents of a relative rather than the issues perused.
The importance of this situation is that all possibilities must be considered in advising a client regarding eligibility and that many occasions require authority not normally needed in the Medicaid eligibility process. Creativity is especially necessary when dealing with the home. With respect to the home and real property, see Posts 6, 11, 14, 32, 34, 35, 36, 37, 38, 41, 42, and 52.
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 #22
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