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    Category Archives: Medicaid

    Married Couples and Long-Term Care Logistics

    There’s another layer of rules for families in which the person hoping to get government help paying for long-term care has a spouse who is still living independently. States are treating such “well” spouses in dramatically different ways.

    Marriage is a unique economic and legal institution. Indeed, when it works out, marriage also means a happy lifetime of living with another. Of course, because life lasts longer and health wanes differently between persons, those unique economic and legal parts to marriage can translate into difficult times later in life.

    Against the backdrop of the in sickness portion of the vows, one difficulty that arises was addressed recently in a Wall Street Journal article titled Long-Term Care and Couples: Who Pays?. That difficulty is the phenomenon of the “well spouse,” the “ill spouse,” and Medicaid.  Practically speaking, if one spouse becomes chronically sick and needs long-term care, will the other spouse be driven into poverty?

    Marital assets, whether owned by the husband or the wife, are part of the equation when it comes to determining Medicaid eligibility. Medicaid is the joint federal/state government program to provide means-tested health care assistance to those who qualify.

    With both federal and state coffers bleeding red ink (with a few state exceptions), Medicaid money is tight, especially in terms of long-term care coverage — whether married or single. As the Wall Street Journal article notes, however, some states are treating the “well spouses” more generously than others regarding how much wealth they may retain while the “sick spouses” are receiving taxpayer support through Medicaid.

    I recommend reading the original article. Also, consider purchasing long-term care insurance so Medicaid does not become part of your future. In any event, a consultation with a qualified Elder Law Attorney would be prudent to evaluate your options.

    Reference: The Wall Street Journal (April 2, 2012) “Long-Term Care and Couples: Who Pays?

    Joint Tenancy Transfers Matter For Medicaid Eligibility

    A New York appeals court rules that a woman who, two years before applying for Medicaid, transferred money to a friend through joint tenancies in a claimed effort to avoid probate did not rebut the presumption that the transfers were made in order to qualify for Medicaid. 

    American law contains a principle that runs like a thread through very fabric of our jurisprudence – one is “innocent until proven guilty.” In other words, the law begins with the premise that one accused of wrongful conduct or motives, whether in a civil or a criminal context, is first given the benefit of the doubt until established otherwise by competent evidence to the contrary.

    Nonetheless, sometimes the tax courts, in their zeal to root out cheats, end up reversing that principle and end up turning on those vulnerable people who act only in the best of intentions: sometimes the elderly are “guilty until proven innocent” when it comes to the courts and Medicare disqualification.

    Consider the case of Mallery v. Shah (N.Y. Sup. Ct., App. Div., 3rd Dept., No. 513277, Mar. 1, 2012), as written about here in a recent post over at ElderLawAnswers.

    Here’s the deal: Paula Mallery wanted to be sure she had safely left her estate to her friend, Ron Stanton, and a moderate estate at that, without her family interceding and dragging the matter into the probate court following her death. Her reasons are her own (but you can appreciate anyone wanting to avoid a public bloodbath). It was something she thought about, even sought counsel for, and ultimately effected by adding Mr. Stanton as joint-tenant on her home and bank accounts. Mr. Stanton withdrew $141,410.12 between 2007 and 2008. Then, in 2009, when Ms. Mallery fell, required nursing home care, and ended up applying to Medicaid to pay for it.

    No, no, no. That was Medicaid’s response. Why? Medicaid maintained that Ms. Mallery had effectively made “uncompensated transfers” and was therefore subject to a 19 month penalty period (and more than a year and a half of such care is expensive!).

    To assume the absolute best of Ms. Mallory and her motivations – because it wouldn’t change the decision either way – she simply intended to pass her property quietly to Mr. Stanton, but ended up getting dragged into court. She appealed the decision and was ultimately rejected on the grounds that she never disproved the allegation her planning moves were motivated with an eye toward Medicaid qualification.

    It’s yet another harsh lesson in unintended consequences and the trials of qualifying for Medicare. In the end, planning for your assets after death must always also be about planning for those assets, and your medical care, throughout the remainder of your life. 

    Reference: (March 5, 2012) “Estate Planning Move to Avoid Probate Earns Medicaid Applicant Penalty Period

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