Your Assets: Here Today, Gone Tomorrow?

by Mark A. Krohn, Partner
Jacobowitz & Gubits, LLP

Phyllis, a dear friend and client, explains that she has been living with and caring for her mother for over two (2) years. Without her assistance her mother would have had to be placed in a nursing home. Now, sadly, Phyllis is no longer well enough herself to continue caring for her mother and wonders what to do. Can her mother transfer her house to Phyllis and still be eligible to receive Medicaid? The answer is ” yes.” A parent can transfer his or her home to his or her child without being disqualified for Medicaid if the child has been residing in his or her parent’s home for at least two (2) years before the parent’s admission into a nursing home and the child has provided care for such parent during such time.

Don and Joyce, husband and wife, came to see me and explained that they had sold their home and were now renting an apartment. They had combined assets of approximately $225,000. I explained that if one of them entered a nursing home and applied for Medicaid the at-home spouse would only be allowed to keep $74,800. So, Don and Joyce purchased a condominium for $150,000. The condominium is an exempt asset for medicaid purposes and their cash is now less than $74,800, the amount of the community spouse resource allowance.

Bette is a widow who worries that she may have to enter a nursing home in the near future. Bette has $10,000. cash in her bank account and no other assets. Bette stands to lose $6,000 of her cash on her medical care before she qualifies for Medicaid coverage. Bette could instead pay $1,500 into a burial fund and thereafter buy a car for her personal use. If Bette were thereafter required to enter a nursing home she should qualify for Medicaid.

Dick always gave his wife, Chickie Baby, expensive jewelry during their marriage for birthdays and holidays. Dick bragged to his pretty blonde social service case worker that the Jewelry was purchased by him as investments rather than as gifts. For Medicaid purposes will any part of the value of the expensive jewelry be counted as Dick’s assets? The answer is “no.” Gifts to spouses are excluded for Medicaid purposes. Further, the gifts will not be considered jointly held property. Unless it can be proven that a gift never occurred, Chickie Baby will be able to keep her jewelry.