Post 48 discusses inaccessible resources, which are treated as excludable for Medicaid purposes (N.J.A.C. 10:71-4.4(b)6 ). The theory is that a countable resource is only such that can be converted to monies to pay nursing home costs. Further, suppose a Medicaid applicant resides with a sibling who has an equity interest in the home and who was residing in the home for at least one year prior to the date of institutionalization (see Post 11).
In this situation, not only is the real estate inaccessible, and therefore not a countable resource, but there is an additional benefit. If the sibling resides in the home for the requisite time period, the applicant's interest in the home can be transferred to the sibling without such transfer being subject to the penalty. Therefore, the individual would qualify for Medicaid, and the home would not be subject to the lien.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© June 2011, Post 149
Tuesday, June 14, 2011
Thursday, June 9, 2011
Dependency Exclusion Revisited
Post 14 discusses the dependency exclusion for the home of a Medicaid applicant. That is, if a dependent relative (as defined in Program Instruction Number 85-8-9), resides in the applicant's home, the home is excluded for Medicaid purposes.
The key to this exclusion is that there is no time period limitation for the dependent relative to reside in the applicant's home. Therefore, if it is contemplated that an individual may be going into a nursing home, a dependent relative (i.e. a child) can move into the home. Unlike the exclusion from the transfer rules, which requires two years of care (see Post 34), the time limitation on dependency does not apply.
Moreover, if the dependent individual is a relative (would be a relative by definition), the Medicaid lien does not apply upon the death of the Medicaid applicant. The lien would only apply at such time as the family member dies, sells or moves out of the primary residence (see N.J.A.C. 49:14.1).
As indicated in Post 14, financial dependency is easy to prove. For example, even a working child could be financially dependent if such child could not afford an abode where the cost is comparable to recipient's primary residence.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© June 2011, Post 148
The key to this exclusion is that there is no time period limitation for the dependent relative to reside in the applicant's home. Therefore, if it is contemplated that an individual may be going into a nursing home, a dependent relative (i.e. a child) can move into the home. Unlike the exclusion from the transfer rules, which requires two years of care (see Post 34), the time limitation on dependency does not apply.
Moreover, if the dependent individual is a relative (would be a relative by definition), the Medicaid lien does not apply upon the death of the Medicaid applicant. The lien would only apply at such time as the family member dies, sells or moves out of the primary residence (see N.J.A.C. 49:14.1).
As indicated in Post 14, financial dependency is easy to prove. For example, even a working child could be financially dependent if such child could not afford an abode where the cost is comparable to recipient's primary residence.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© June 2011, Post 148
Wednesday, June 1, 2011
Review of Advantages of Community Spouse Resource Allowance
As indicated in Post 11, the community spouse resource allowance is not limited after the applicant receives Medicaid.
The advantages of this have been discussed in several posts and are to be considered in accordance with the situation.
For example, if a spouse is in a nursing home and the home has been transferred to a community spouse, the community spouse may sell or gift the residence after the applicant receives Medicaid (see Post 94). Similarly, if the community spouse inherits property after the applicant receives Medicaid, the inheritance is received free of the Medicaid rules.
As indicated in Post 33, if the community spouse is working, it has been suggested that the community spouse cease working until the applicant receives Medicaid. After such time, the community spouse can resume working and receive the earnings free of the Medicaid rules.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© June 2011, Post 147
The advantages of this have been discussed in several posts and are to be considered in accordance with the situation.
For example, if a spouse is in a nursing home and the home has been transferred to a community spouse, the community spouse may sell or gift the residence after the applicant receives Medicaid (see Post 94). Similarly, if the community spouse inherits property after the applicant receives Medicaid, the inheritance is received free of the Medicaid rules.
As indicated in Post 33, if the community spouse is working, it has been suggested that the community spouse cease working until the applicant receives Medicaid. After such time, the community spouse can resume working and receive the earnings free of the Medicaid rules.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© June 2011, Post 147
Wednesday, May 25, 2011
Advantages of Purchasing a Home by Community Spouse Revisited
In Post 11, the advantages of purchasing a home by the community spouse were discussed.
Suppose there are community assets of $400,000.00 and the community spouse is renting a home. The community spouse resource allowance maximum is $109,560.00. The community spouse can protect additional assets by purchasing a home which would be an excludable resource. As indicated by Post 11, the resources of the community spouse are no longer relevant after the applicant receives Medicaid.
Therefore, a viable planning technique would be for the community spouse to temporarily purchase a residence, which could be sold or gifted after the applicant gets Medicaid.
Further, as discussed in Post 33, if the community spouse is working, the community spouse should cease working until after the applicant receives Medicaid.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2011, Post 146
Suppose there are community assets of $400,000.00 and the community spouse is renting a home. The community spouse resource allowance maximum is $109,560.00. The community spouse can protect additional assets by purchasing a home which would be an excludable resource. As indicated by Post 11, the resources of the community spouse are no longer relevant after the applicant receives Medicaid.
Therefore, a viable planning technique would be for the community spouse to temporarily purchase a residence, which could be sold or gifted after the applicant gets Medicaid.
Further, as discussed in Post 33, if the community spouse is working, the community spouse should cease working until after the applicant receives Medicaid.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2011, Post 146
Wednesday, May 18, 2011
Negative Results of Disclaimer by Nursing Home Resident
Although a disclaimer may have estate planning benefits, such an action would be treated as a transfer under the Medicaid rules (see Federal Statute 42 U.S.C. Section 1396p(c) and (e)). The first Statute treats a transfer as any disposition and the second statute requires an affirmative act.
Since a disclaimer is an affirmative act, the period of ineligibility from the disclaimer would run not from the date of the disclaimer but from the date the individual was in the nursing home and down to the appropriate amount ($2,000 or $4,000).
Pursuant to Medicaid Communication 10-02 and 10-06 , reverse half-a-loaf planning will not work in New Jersey. Therefore, the only choice is not to disclaim and to spend the monies on the nursing home. The appropriate planning would be to transfer monies to the appropriate donees who would then use the monies for the benefit of the nursing home resident. Should any monies remain after the 5 year look back period, such funds would be saved for the donees.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2011, Post 145
Since a disclaimer is an affirmative act, the period of ineligibility from the disclaimer would run not from the date of the disclaimer but from the date the individual was in the nursing home and down to the appropriate amount ($2,000 or $4,000).
Pursuant to Medicaid Communication 10-02 and 10-06 , reverse half-a-loaf planning will not work in New Jersey. Therefore, the only choice is not to disclaim and to spend the monies on the nursing home. The appropriate planning would be to transfer monies to the appropriate donees who would then use the monies for the benefit of the nursing home resident. Should any monies remain after the 5 year look back period, such funds would be saved for the donees.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2011, Post 145
Monday, May 9, 2011
TIAA-CREF and its Effect on Medicaid
Many Medicaid applicants are recipients of a retirement plan known as TIAA-CREF. This is the retirement benefit paid to those working within the college environment.
There are two basic types of retirement benefits. One provides for an irrevocable election of payment of an annuity. The other type of benefit may be in the form of an annuity, but the remaining balance constitutes an available resource.
Therefore, it is incumbent upon counsel to carefully review the available plan. Should the benefit remain an available resource, this has a negative effect on Medicaid eligibility. However, if the benefit is an irrevocable election, the funds must be used to help defray the cost of Medicaid in the manner of a pension or social security.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2011, Post 144
There are two basic types of retirement benefits. One provides for an irrevocable election of payment of an annuity. The other type of benefit may be in the form of an annuity, but the remaining balance constitutes an available resource.
Therefore, it is incumbent upon counsel to carefully review the available plan. Should the benefit remain an available resource, this has a negative effect on Medicaid eligibility. However, if the benefit is an irrevocable election, the funds must be used to help defray the cost of Medicaid in the manner of a pension or social security.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2011, Post 144
Tuesday, May 3, 2011
Designation of Agent Under a Power of Attorney
The significance of a power of attorney with respect to accessibility has been discussed in Post 54. Another significant aspect of the power of attorney is the designation of the agent. For example, if a husband and wife are adverse in any way, they should not be designated as agent. Similarly, children of the parents may feel that they do not want to serve as agents given a conflict situation.
As discussed in my webinar, Ethical Dilemmas for Elder Law Practitioners, although many conflicts can be waived, the seminal question is whether they should be waived. Therefore, counsel must address the question of representation of the husband and wife when they are adverse. The second issue is the designee of the agent who ideally would not be the spouse or children but should rather be an independent party.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2011, Post 143
As discussed in my webinar, Ethical Dilemmas for Elder Law Practitioners, although many conflicts can be waived, the seminal question is whether they should be waived. Therefore, counsel must address the question of representation of the husband and wife when they are adverse. The second issue is the designee of the agent who ideally would not be the spouse or children but should rather be an independent party.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2011, Post 143
Subscribe to:
Posts (Atom)
