Legal Question in Wills and Trusts in New York

Re: Home Assets, liquid assets & nursing homes

Very generally, and the rules change from time to time, for each $4000 your Mom transfers she will not be able to collect Medical Assistance for one month, up to 36 months total, from the date of the transfer. So, if she were to deed the house to you, that would be a transfer of $100,000 and would disqualify her for 25 months from the transfer. NOTE: if she does give you the house, you will have a "carry over" basis of what your Mom paid for the house as opposed to the "stepped up" basis as of the date of Mom's death. A common technique is to have Mom give the house to the kids but retain a "life estate", which is the right to use it. Then, at Mom's death, the Medical Assistance folks calculate the value of Mom's life estate and collect that value (based on a percentage, declining as Mom ages).

THIS AREA OF LAW IS IN FLUX, and you should consult an attorney about your particular circumstances. This is based on your zip code, as being in Minn.; this is general discussion not a lawyer client relationship.

Re: Home Assets, liquid assets & nursing homes

There is a 3 year look back period on all transfer of assets. So if you are planning to make a transfer now, you will need to wait for 3 years in order for it not to be considered. I strongly suggest you speak to a specialist in elder law.

Should you like to discuss this or any other legal matter, you can call my office to schedule an appointment for a consultation or in the alternative, I can be reached for on-phone low-cost legal consultation at 1-800-275-5336 x0233699.

Re: Home Assets, liquid assets & nursing homes

Minnesota has a three year look back period. That means any uncompensated transfers made within three years of a Medical assistance application are examined. Also, there is a period of ineligibility that attaches to any uncompensated transfers. The length of this period depends on the amount transferred. Regarding the house, one could transfer the fee title and reserve a life estate or transfer the whole fee title. There are advantages and disadvantages to both. If exempt assets are purchased, there is no period of ineligiblity. These are clearly preferable to gifts. This person needs an Elder Law attorney. I would be happy to help with this case.

Please feel free to call me, Bob Chesley, at 507-625-3000.

Thanks!

Re: Home Assets, liquid assets & nursing homes

Annual gifts of any assets (cash, house, etc.) can be made to anyone, up to $11,000/year. Second, she also has a lifetime gift exemption which can be $1,000,000 maximum so no gift or estate taxes would be due if she totally transferred all of her assets. You must examine the Medicaid laws of the state of her residence. While there are applicable look-back rules, they vary from state to state, as to how the exclusion period is calculated. Some states exclude from look-back annual gifts, if they are part of an on-going gift program, up to the annual allowable amount per recipient. Also, in making the calculation of exclusion period, the amount given by gift starts on the date the gift is made, and is calculated using a formula that differs from state to state. You need to check what is the amount in the state in question that they use (usually is the state's number for average monthly cost of a nursing home). The maximum look-back is 36 months (3 years) but may be shorter. For example, if she had $99,000 of assets, which she gave away in a lump-sum, and the average monthly cost of a nursing home in her state of residence is $3,000/ month, the look-back is 33 months, not the full 3 years. If the gifts were spread out, say $33,000 over 3 months, and using the $3,000 figure, each gift would have an exclusion period of only 11 months so if the gifts were made in several installments, over 3 months, the look-back would only be 13 months for the same $99,000, not 33 months. Until eligible, she would be responsible to private pay the costs, but these would be reduced by her pension and social security. Last comment: Many nursing homes require some minimum guaranty of private pay, and will not take a direct Medicaid applicant (economics are involved), so anticipate there could be some money required to be paid in any event, the amount determined by the home's requirements. My recommendation: contact an elder-law attorney where she lives, determine the value of her assets and that state's average cost of care, plus check the admission requirements of the prospective home where she will be moving. Then have the attorney suggest the best method of gifting based upon all determined facts. Keep her at home, even if you need periodic assistance at home, for as long as possible, as each month she stays home reduces the ineligibility period. Finally, since it takes a few months to get her qualified, do not apply for Medicaid until the month before she is eligible, even if you need to private pay for 1-2 months, since if you apply and they process her application before she is eligible, she will be denied and there could be ramifications. At worst, you would have overpaid a month or 2, but since her application approval will be retroactive, this money will be returned by the home.