Friday, April 29, 2011
By Mr. Noah Kaminer, Administrator
Baruch and Esther Grossman worked hard all of their lives. All of their children were married and raising their own families.
Although it wasn’t always easy, they finally managed to pay off their mortgage, built up a nest egg, and were even able to provide a little extra support to their children. Baruch was looking forward to retiring so he could once again devote his days to learning full time. Suddenly, the unthinkable happened – at the age of 68, Baruch suffered a severe debilitating stroke which left him needing around the clock care. Overnight, their lives changed.
With her children living far away, Esther was simply unable to care for Baruch on her own. She had to begin thinking about different types of long term care and how to pay for it without depleting their entire life’s savings. Medicaid would cover significantly more than Medicare, but they had significant assets and she was unsure if they would qualify. Some of the more common Medicaid myths made her even more confused.
Myth: I have to give away everything I own to get Medicaid. You do not have to be completely destitute to get Medicaid. While it is true that in order to qualify for Medicaid you cannot have substantial assets or a sizable income stream, you are allowed to own certain assets, car, furniture, and other personal property, to name a few. These assets can generally remain within the family – the trick is what asset is “countable” and what is “non-countable” under the Medicaid rules.
Myth: Medicaid will take my home. Medicaid will not take your home. If you’re married and you or your spouse need to go into a nursing home, your home is exempt and cannot be taken when applying for Medicaid. However, according to Eli Goldbaum, President of SeniorCare, a consulting firm which regularly assists elderly clients and their families with Medicaid planning and asset preservation, New York State does “count” homes with equity exceeding $750,000 in determining eligibility unless a spouse or a child under 21 lives there. In addition, married people do need to be careful in their planning, because if one spouse dies, the home may become available to Medicaid if proper planning was not put in place. Like much of Medicaid law, rules regarding the home can be complex, so it is a good idea to contact a qualified Medicaid attorney or professional to help protect your home.
Myth: If I give away anything, I cannot be eligible for Medicaid. Medicaid rules do penalize some transfers of property, and Medicaid agencies will examine financial records five years back to see if asset transfers are made. Basically, the government doesn’t want people creating their own poverty to become eligible for Nursing Home Medicaid. As such, Medicaid looks back five years for income and assets to determine eligibility. Divestment of assets during this time may lead to a penalty in terms of wait time for Medicaid approval. But, not all transfers cause problems with getting Medicaid — it depends on who receives the assets and the type of property transferred. Additionally, transfers in New York have minimal impact on the eligibility for Community Medicaid (home health and hospital care) as long as the individual is residing within the community and not in a nursing home.
Myth: Now that I need long term care, it’s too late to take advantage of Medicaid planning and protect our assets. It is never too late to protect your assets — even if you are already in a nursing home. There are a variety of techniques which will allow assets to remain in the family, while still allowing a loved one to be eligible for Medicaid. Although it’s always best to plan for Medicaid while you and your loved ones are healthy, even if you did not, you can still act and save as many assets as possible while qualifying for Medicaid.
The goal for Esther will be to ensure that her beloved husband receives the best care possible. However, she does not need to go through their life’s savings to achieve this. With proper planning and professional guidance through the complex rules and laws of Medicaid, Baruch may be able to qualify for Medicaid, allow his assets to remain in the hands of his wife and family, and provide an inheritance to his children and grandchildren.
This article presents a general overview of basic Medicaid rules and concepts and is not intended to constitute legal advice. Please consult a competent Medicaid attorney or professional for more specific information regarding Medicaid planning.
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