|
Q. If my
father is in a nursing home, does he have to sell his home in
order to qualify for Medicaid? |
A. You do not have
to turn your home over to the Nursing Home or the State in order to
qualify for Medicaid. The
County Assistance Office only requires that you spend “available”
assets on the cost of your care. As
long as you intend to return home if you get out of the nursing home, your
residence is “unavailable.”
It doesn’t matter if it is unlikely that you will ever return
home. Your home is
protected so long as you are alive. Medicaid
could have a claim against your home if it is part of your estate when you
die (this is called Medicaid
Estate Recovery). With
careful planning, you can prevent this.
| Q. My
mother is on Medicare. Won't that take care of the nursing
home bills? |
A. Traditional
Medicare requires a three-day hospital stay within 30 days of your
nursing home admission, and the receipt of daily skilled care in the
nursing home. Otherwise,
you get no payment from Medicare or your Medicare Supplement policy.
Most people residing in nursing homes are not receiving what
Medicare considers to be skilled care. ("skilled care" is care
which involves skilled nursing or rehabilitative personnel such as
registered nurses, LPNs, or physical therapists).
As a result of these restrictions, a majority of people who enter
a nursing home don't get any Medicare coverage at all.
And
even if you do qualify for Medicare, it will only pay for a limited
period of time. As long as
you meet the prior hospitalization and skilled care requirements,
Medicare will pay in full for the first twenty days.
After that, if you continue to meet the skilled care requirement,
you must pay the first $115.00 [in 2005] a day and Medicare will pay the
rest of the daily bill. (Many
people have Medicare Supplement or Managed Care coverage that will pay
the initial $115.00 for them).
| Q.
Do I have to give away everything I own before I can qualify for
Medicaid? |
A. Medicaid
allows you to continue to own many kinds of assets, including your home,
and still qualify. These
protected resources are referred to as “unavailable” or
“non-countable.” You get to keep your non-countable assets.
But you need to be careful.
Without proper planning, the state may be able to seek repayment
from the sale of your home or other assets after your death. The rules
are very complicated and most people need expert help to figure out how
to get to keep everything to which they are entitled to during their
lifetime, and avoid state claims at death.
| Q.
What is the difference between a Health Care Power of Attorney
and a Living Will? |
A. The
Health Care Power of Attorney and the Living Will are legal tools that
can help ensure that you retain some measure of control over the
medical treatment you will receive in the event that you ever lack the
competency to make treatment decisions for yourself.
A Health Care
Power of Attorney is a more flexible document. It allows you to name
an agent to act on your behalf whether you are terminally ill or just
incapacitated as a result of a recoverable condition like a
stroke. A living will, however, is only effective if you are
terminally ill AND in a permanent vegetative state or permanent
comma. If you would like more information on this topic,
visit our Powers of
Attorney Page for more articles.
| Q.
Can I sell my house to my kids for $1.00? |
A.
There are many reasons people want to give their home to their
children. It may be to save death taxes, avoid probate or to
protect the home from nursing home costs, but there are possible
negative consequences as well.
If
you give your home to your children and apply for Medical Assistance
within 36 months of the gift, the transfer of this otherwise protected
asset can make you ineligible for Medical Assistance. Also, if the home
has appreciated significantly in value, its transfer to your children
can also an income tax burden. If a child inherits the home
through the death of a parent, the child gets a "stepped up"
tax basis in the home. In effect, the capital gains tax on the
appreciation of the home's value is "forgiven" for income tax
purposes. However, if the home is given as a lifetime gift, the
children will have to pay the capital gains income tax on the
appreciation in value, resulting in a loss of thousands of
dollars.
If
you talk with an attorney, he or she will be able to advise you of the
positives and potential pitfalls of giving your home away. There
are many planning options available that can ensure the best possible
outcome for you and your family.
| Q. My
loved one is already in the nursing home. Isn't it too
late? |
A.
Even if your loved one is already in a nursing home, it's not too late
to do planning. Delay is your enemy, so the sooner you start
planning, the more money you will be able to protect.
© 2000-2005
Marshall & Associates www.paelderlaw.com
