Applying for Medicaid Without an Attorney - Part Three

June 1, 2010

This edition of the Koldin Report E-Newsletter continues our series reviewing the risks you take when applying for Medicaid without being represented by an Attorney. All prior newsletters are saved on our website can be found by clicking here.

In this third edition of this series, we will review how even after a Medicaid application has been approved, your assets can still be in jeopardy.

We recently received an email from a son who signed a Last Will and Testament with our office a few years ago to tell us about his parents:

Husband and wife owned a home jointly and had $50,000 in a joint savings account. The wife became ill and required nursing home care. The husband was advised by the nursing home that because their total life savings was below the $74,820 resource allowance for the healthy spouse and because the family home is exempt for the healthy spouse, the husband should apply for Medicaid on his own without an attorney.

The husband did apply for Medicaid and was approved for coverage for his wife. The husband thought that his home and life savings were protected.

Since the son had a relationship with our office, he decided to email us to see if his father was really protected or if he had a false sense of security.

Unfortunately, the family could still lose the home and the $50,000 because the husband did not take important steps to protect those assets for the long term. Let's look at some of the possible ways they could lose their life savings:

1. Husband could predecease his wife. Since the home is joint, the wife would now become the sole owner and the home would be lost towards the cost of her care. Also, the husband has a Will leaving everything to the wife so she would inherit the $50,000 which would also be lost towards the cost of her care.

2. Husband could become ill himself and require nursing home care in the future. The home and life savings would be lost towards the cost of his care.

In the above case, the husband should at a minimum, have a deed prepared to transfer the joint ownership of the house to just the husband's name. The husband should also sign a new Will leaving his assets to his children rather than to his wife. The husband should also sign a Power of Attorney and Health Care Proxy.

To protect his assets in case he someday might need Nursing home care, the husband should consider options such as transferring his home to an Irrevocable Family Trust or possibly to his children while reserving a life estate. There are advantages and disadvantages to each planning option which we will review in future newsletters and are discussed on our website in here.

The point of this example is to show that when people do not know their legal rights and handle the Medicaid application process on their own without an attorney, they can get a false sense of security and still ultimately lose their life savings.

When the Koldin Law Center, P.C. handles a Medicaid case, we handle much more than just the application process. We review with our clients the proper steps to protect their assets beyond establishing initial Medicaid eligibility. There is something you can do.