Protecting Assets From Nursing Homes

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.

 

 

You may like these other stories...

On the path to building a successful practice, sometime we get caught up the urgency of the moment, forgetting to take the time for extended thought. Reflecting on what I've learned in observance since I began in my...
A version of this article originally appeared at Practice Development Counsel. Many professions and industries struggle with inter-generational challenges. The advertising industry is just one of those industries...
By Phyllis Weiss Haserot, President, Practice Development Counsel This post originally appeared at Practice Development Counsel. Reflection is something I do a lot of – I have for many years quite...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.