"Transfers" or
gifts can cause BIG PROBLEMS if you don't follow the rules
EXACTLY. OTHER EXEMPT TRANFERS MAY EXIST. CONSULT AN
ELDER LAW ATTORNEY.
Getting Ready to Be On Medicaid in
How Should You "SPEND DOWN"?
(revised
(Not Legal Advice - Consult Your Own
Attorney)
Attorney Lisa Nachmias Davis
Phone 203-776-4400 - fax 203-774-1060
1. First,
what does it MEAN to “spend down” assets?
º To qualify for Title 19 (Medicaid) for
LONG-TERM CARE1 you can ONLY have:
º If you have more than this, you do not
qualify (possible exception: if you are married and your
combined income is under $2,739 -- but consult an attorney
first). The Department of Social Services, which
administers Medicaid in
º Suppose you have not $1,600, but
$51,600. You have $50,000 too much. You have to “spend
down” to $1,600 before you will be eligible. YOU HAVE
TO BE "SPENT DOWN" BY MONTH'S END TO BE ELIGIBLE FOR
THAT MONTH. "Spent" means the money is GONE --
the State doesn't care if you owe debts -- the State isn't
interested in your "net worth."
2. How should you
“Spend Down” assets if you are not married?
º MEDICARE SUPPLEMENTAL INSURANCE may
still be purchased and cover you even if you are in a nursing
home. This can be vital to cover the co-pays for days 21 -
100 of the nursing home stay which might be $10,000+ otherwise.
CAUTION: TALK TO A LAWYER FIRST if you made a
"gift" within the past 5 years. Note: you may not
need this if you have "low" income and qualify for a
"Medicare Savings Plan."
º FUNERAL ARRANGEMENTS: $5,400 maximum for
an irrevocable funeral contract, no limit on a "burial
trust" for casket, grave lining, etc. One cemetery
plot (one for each, if married).
º GET YOUR TEETH CHECKED. The Title
19 program can have terrible dental coverage, especially for
nursing home residents, and few dentists are willing to
participate. The State will pull your teeth for you, but
that’s about it. NOW IS THE TIME to have your teeth
checked thoroughly, all dental work completed and all fixtures
bought. If you are in a nursing home, ask whether you can
be transported to a dentist outside. If the work won't be
done before you have "spent down," arrange to pay the
bill up front.
º GET YOUR EYES CHECKED. The
Title 19 program is not much on eyes either. NOW IS
THE TIME to buy spare pairs of glasses, or if you prefer, contact
lenses and all the fixtures.
º CHECK YOUR FEET, SKIN,
EARS.... Title 19 covers the basics. You do NOT
have your choice of doctor and you do not get everything done
that can be done. The State may only pay for a crummy $400
hearing aid. NOW IS THE TIME to attend to any problems that
the State may not find important, especially getting the best
hearing aid/wheel chair/voice adapter/ventilator money can buy.
º GET YOUR AFFAIRS IN ORDER. Whether
or not you will really need a will, you should have a
General Durable Power of Attorney, and if it does not include
health care provisions, then also a Designation of Health Care
Representative. It is a good idea to appoint a Conservator
in case one is required. Finally, many people want Living Wills
that authorize life support to be withheld or withdrawn if you
are terminal or in a "persistent vegetative
state." You MAY add more specific instructions,
too. All health matters can be combined in one document.
º MAKE ANY EXEMPT TRANSFERS. While
many gifts can cause problems for Medicaid eligibility, some do
not. These include:
§
Transfer of your home, or anything else, to a child receiving
Social Security Disability or SSI benefits. Consult an
elder law attorney or other knowledgeable attorney if you plan to
transfer anything to a disabled person who gets benefits.
§
Transfer of your home to a sibling who lived with you for the
prior year and who owns an interest in your home (name is on the
deed).
§
Transfer of your home in certain other situations to a child who
cared for you for 2 years and lived with you. Consult an
elder law attorney on how to document this for the State.
§
SOMETIMES: transfer of money to anyone who lived with /
cared for you for 2 years - consult an attorney.
§
If you are under 65: Transfer to a "special needs
trust" or "pooled trust account" for your own
benefit! Consult an elder law attorney. If you are
over 65, this option may not be available -- but it depends --
consult an elder law attorney.
"Transfers" or
gifts can cause BIG PROBLEMS if you don't follow the rules
EXACTLY. OTHER EXEMPT TRANFERS MAY EXIST. CONSULT AN
ELDER LAW ATTORNEY.
º SHOP 'TIL YOU DROP or ask someone
else to help you! BUY whatever will make your stay more
comfortable. ONCE YOU ARE ON MEDICAID, YOU HAVE TO MAKE DO
ON $60/MONTH. Buy a new TV/VCR/DVD, a portable tape or CD
player, a laptop computer, pre-paid Cable or internet service,
magazine and newspaper subscriptions, a new bed-jacket, your
favorite toothpaste, bedroom slippers.....
º PAY IN ADVANCE FOR HELP WITH THE
MEDICAID APPLICATION. If your financial affairs and plans
are very simple, you may not need help. In that case, a
friend or family member, or you, can complete the paperwork and
deal with the State's questions. If you, your family or
friends are not "paper people" and might have trouble,
or can't be relied upon to respond quickly to the State's
follow-up questions, or if you are married, OR IF YOU HAVE MADE
ANY TRANSFERS, consult an elder law attorney. This
may, or may not, be a disaster -- you will need help. IT IS
BETTER TO PAY FOR THIS UP-FRONT WITH YOUR OWN MONEY, THAN FOR
YOUR FAMILY TO PAY LATER WITH THEIR MONEY. Be sure to
consult only someone who is knowledgeable about Medicaid in your
state.
º PAY IN ADVANCE FOR
"PERSONAL SERVICES." If you do not have close
family you can rely upon, you may want to set up a contract
with a friend or care provider who can attend care conferences
about you, run errands for you, visit you regularly, etc. Consult
an attorney and don't try this at home.
º MAYBE A POOLED TRUST ACCOUNT?
There may be a way to set aside a little fund for extra needs --
the State will get it when you pass away. Consult
an attorney, don't try this at home.
3. How should you
“Spend Down” assets if you ARE married?
In
addition to the ways described above, you can:
º FIRST, SEE A LAWYER ABOUT
HELPING YOUR SPOUSE, BEFORE SPENDING ANYTHING. I am
not trying to be self-serving by saying that it is VITAL that you
consult an elder law attorney RIGHT AWAY. The State of
º PUT THE MONEY IN THE FAMILY
HOME. Your home is an exempt asset as long as
your husband or wife (or minor or disabled child) is living
there. Pay off the mortgage (unless you are trying
to protect funds for your spouse, in which case check with your
lawyer). Install the vinyl siding; get a new roof and
furnace; buy the replacement windows; add a new carpet; put in
the new kitchen your wife always wanted. She can always
borrow against the house later, or even sell it.
º PUT THE MONEY IN THE FAMILY
CAR. If you are married, you may want to spend the money by
investing in your car, which is an exempt asset.
Trade in that 1990 Chevvy for a 2010 Prius!
º DON'T FORGET TO PAY APPLIED INCOME
-- unless you have a spouse in the community with low income, in
most cases your income (minus Medical insurance premiums, minus
$60) will have to be paid to the nursing home every month you are
on Medicaid. DON'T FORGET or someone will have a nasty
surprise months later when the bill comes in. See my handout.
This summary was provided as general
information, NOT as legal advice, by
Attorney Lisa Nachmias Davis,
1. This article addresses Medicaid for
the elderly or disabled for long-term care received at home or in
a nursing home - other Medicaid programs have other rules.
2.
Numbers current to
3.THIS IS NOT LEGAL ADVICE --ONLY
GENERAL REMARKS. CONSULT YOUR OWN ELDER LAW ATTORNEY!!!.