Here is a scenario that many people find themselves in: they have to find a way to pay for a nursing home or other long-term healthcare facility that they cannot afford. Realistically, most people can’t pay these sort of costs out of pocket. It would not be out of the question to discover that someone would need to pay upwards of $7000 -$10,000 a month to stay in one.
These same people are put into a (seemingly) impossible situation. They have to find the money to support their health needs. Medicaid is a possible solution, but they fall for the myth that if they own assets they are ineligible for the very program they need the most. Or, they are told they have to give away their assets before they go into a nursing home. As an Elder law attorney I asked on a regular basis that if I go into a Nursing Home will I lose everything I own?
I am also asked if one should give away assets before going into a nursing home? My Answer to both of those questions is – Absolutely not.
There are two reasons for this:
LOOK TO THE TYPE OF ASSETS YOU OWN
Under Medicaid law there are certain TYPES of assets that do not have to be sold, spent or used to pay for your nursing home care. If you own a home, an IRA/401k/403b, automobile, personal effects, term life insurance, these are the types of assets that are PROTECTED from Medicaid spend down. If you are married, there are additional types of assets (up to the current limit of $131,000 in Georgia) that are also protected for spouse at home called the Community Spouse Resource Allowance. These types of assets for your entire life, just because of the type of assets they are, AND as long as you:
KEEP OWNERSHIP OF YOUR ASSET
If you are ever told you need to give-up, transfer or share ownership of your assets (especially your home) in to protect from Medicaid spend down, get a second opinion. Get a third one if you need to. These are the assets that you spend a lifetime accumulating. In all likelihood, you wish to pass them to your loved ones when you are gone.
The worst-case scenario is that you rush to get rid of your assets only to realize you are still not eligible for Medicaid. Find an attorney and tell him that you are in a crisis. Ask how you can protect your assets AND still qualify for Medicaid.
The Look-Back Period
To build off what was discussed in the previous section, Medicaid’s look-back period is critical. It is a prime example of how a misguided attempt to get rid of your assets can have dire consequences.
Frankly, it is heartbreaking to see people in this position. They are pinned into a difficult situation, trying to find a way to pay for their healthcare. Medicaid goes back and reviews a recent history of your assets and who owns them.
Primarily, they look to see if you either gave your assets away or sold them under fair market value. In other words, you cannot sell your home to your child for $1 and transfer the title. Their position is that had you not given your assets away, you could have paid for your healthcare. This could leave you ineligible for Medicaid. And you will learn this after you have given away your property and possessions, and may not be able to get them back.
In every state except for California, the look-back period is 60 months.
Kevin Tharpe P.C.
J. Kevin Tharpe got into estate planning and elder law to protect the very people this article is about. If you are in a crisis, know that J. Kevin Tharpe P.C. will work with you to save your assets, without you losing everything you own. Contact us to schedule a consultation today.