By JOHN J. SCIACCA, ESQ.
Member NNA Preferred Provider Network
Clients who can afford Long Term Care Insurance (LTC) can usually insulate themselves from the expenses of a nursing home which can cost between $200-$400 per day.
Clients who may be liquid or with limited income can be dismayed at these significant costs.
If a person is single, Medicaid will pay for nursing home costs when assets are down to approximately $3,550. For a married couple liquid assets can be as high as approximately $84,000 with the principal residence also being exempt as long as the other spouse resides there. However, if the spouse at home dies first, there can be a right of recovery against the home for what Medicaid pays each month, which is approximately $7,000 per month.
It is a little known fact, but a single individual can protect the home by transferring it to a child who has lived in the house for at least two years and who has been providing care to the parent that has kept the parent out of a nursing home. The house can also be transferred to a sibling who has an equity interest in the home. It is not necessary to be on the deed, but what has been successful in the past is to show that the non-owner sibling helped to make improvements or even paid part of the mortgage or expenses. Other permitted transfers of the home can be to a minor or disabled child or even to a spouse if the home is in the name of the Medicaid applicant alone.
Medicaid has a 36 month "look back" period for simple transfers and 60 months for transfers to irrevocable trusts. However, the penalty period can be less than 36 months based on the value of the gift given. You will be denied one month Medicaid coverage for approximately every $7,000 transferred. Thus if you transferred $21,000, the Medicaid penalty period would be 3 months from the date the transfer was made. You are not held ineligible for Medicaid for the full 36 month period.
There are many other techniques available to protect assets of both a single person and a married couple. These include funeral prearrangements, annuities, purchasing exempt assets and doing repairs and improvements on your home.
Consulting with an experienced Asset Protection Attorney can save an inheritance for a family and protect the self-esteem for the disabled senior citizen.
This article has been provided by John J. Sciacca, Esq. John is a member of the National Network of Accountants Preferred Provider Network. His offices are located in Staten Island and New Jersey. If you would like additional information on this issue or John Sciacca’s firm go to www.sciacca-law.com or call him directly at (718) 979-7100. For further information about the National Network of Accountants call (800) 234-PLAN ext. 268 or go to www.nnaplan.com on the Internet.