Is it Too Late When you are Already in a Nursing Home — Exempt Transfers
August 2, 2016
This edition of the Koldin Report E-Newsletter continues a series that answers the question, “Is it too late to protect any of your life savings when you are already in a Nursing Home?” This edition reviews the right to make certain exempt transfers that will not be penalized by Medicaid even when you are in a Nursing Home. All prior newsletters are saved on our website. You can read them by clicking here.
You Can Transfer Your Home to Your Caregiver Child
Sometimes children make great personal sacrifices to help keep their parents out of nursing homes. Some children have lived with their parents for many years. Some children move in with their parents specifically for the purpose of taking care of them. Some children even sell their own homes and move to another state just to take care of their parents.
Congress recognized that sometimes parents would have needed nursing home care much sooner if it were not for these devoted children. The Medicaid laws allow a parent to transfer his/her family home to his/her child without a Medicaid transfer penalty if the child resided in the home for a period of at least two (2) years immediately before the date the parent entered the nursing home, and if the child provided care to the parent which permitted the parent to reside at home rather than in a nursing home.
The Medicaid Applicant has the burden to prove to the Medicaid Agency that (1) the child lived in the family home as his/her permanent residence for the past two years and (2) but for the child’s care, the parent would have had to enter the nursing home during this two year period.
You Can Transfer Your Home and Life Savings to Your Child Who Is Certified Blind or Disabled
Under the Medicaid law, even if a parent is in a Nursing Home, there is no transfer penalty period of ineligibility for transfers made from a parent to a child who is certified blind or disabled. However, if the child is also receiving government benefits such as Medicaid or SSI, such a transfer could cause the child to lose his/her own benefits. Therefore, when appropriate, a Supplemental Needs Trust should be considered. For a discussion of Supplemental Needs Trusts, please see our website by clicking here.
You Can Transfer Your Home to Your Sibling Who Lives with You and Has an Equity Interest in the Home
When siblings live together, especially later in life, one sibling may have moved out of his/her home and moved in with his/her sibling. Sometimes the home is owned by both siblings, but sometimes the home is only owned by one sibling. Either way, when 2 siblings live together, they often share expenses in maintaining the home. If the sibling who is not in a nursing home was living in the home for at least one year as his/her primary residence immediately before the ill sibling entered a nursing home and the at-home sibling has an equity interest in the home, then the sibling who is in the nursing home can transfer the home to the at-home sibling without a transfer penalty period of ineligibility. Some examples of an equity interest provided by New York State in an Administrative Directive are: Co-ownership of the home, mortgage payments by the at-home sibling, and/or capital improvements paid for by the at-home sibling that are not merely cosmetic.
You Can Transfer Your Home and Life Savings to Your Spouse
There is no transfer penalty period of ineligibility for any assets transferred to your spouse. Once the ill spouse transfers all of his/her assets to the Community Spouse (at-home spouse), then the Community Spouse can consider asset preservation options such as:
- Spousal Refusal (See prior newsletter by clicking here)
- Purchasing an Annuity
- Gifting and Lending with a Promissory Note
The next newsletter in this series will continue to review how you may be able protect some or all of your assets even when you are already in a Nursing Home, by discussing Annuities as a method of converting your life savings into an income stream.
When the Koldin Law Center, P.C. handles a Medicaid case, we not only handle the entire application process, but we also review asset protection options with our clients including options for special exempt transfers to your caregiver child, to your sibling with an equity interest, to your child who is certified blind or disabled, and/or to your spouse. We review with our clients who are already in a Nursing Home options to protect some or all of their assets beyond merely establishing Medicaid eligibility.
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