An elderly client, whose husband lives in a skilled nursing home due to his lack of mental capacity, retains us to apply for long-term Medicaid for her husband so that the government will help pay for his cost of care. However, to be eligible for long-term care Medicaid, all uncompensated transfers within five (5) years prior to the application are required to be reported to the state to determine if there is a transfer penalty. This is a requirement to prevent fraud since Medicaid is “means-tested” (otherwise, applicants would simply give away their resources to get below the limit so that the government would pay for care costs).

Prior to applying for Medicaid, we discovered that more than $100,000 had been given by the client to an “acquaintance” to help the acquaintance who supposedly had cancer and was going to “repay” client by naming her as a beneficiary of her life insurance policy. We then requested the acquaintance for any proof of the cancer, etc. No proof was provided. We suggested to the client to press criminal charges or at least file a police report or contact Senior Source (which connects with the District Attorney’s office, the Probate Court and Adult Protective Services). However, the client declined.

As a result of the transfers, the client was left virtually penniless and the state initially penalized her (meaning that the state would not help pay for her husband’s care costs) for several years for giving money to the acquaintance within five (5) years prior to her husband’s Medicaid application. However, we advised the state that the purpose of the law was to prevent transfers intentionally made to obtain Medicaid. The transfers to the acquaintance were made monthly even prior to husband’s institutionalization. Thus, we were successful in persuading the state that the $100,000 transferred was not made for the purpose of obtaining Medicaid and thus the client was not penalized resulting in the state now helping pay for her husband’s cost of care.

Although elder abuse, guardianship and further action against the acquaintance have yet to be resolved, at least the client now receives assistance for the payment of husband’s nursing home and medication bills.

If interested in knowing more about “Estate Planning Essentials”; consider registering for our next free workshop on Saturday, December 15, 2018 at 10:00 a.m. or on Thursday, January 10, 2019 at 1:00 p.m.