Crisis Medicaid Planning/Sheltering Assets for People Already in a Nursing Home
What happens if your spouse is about to go into a nursing home, or is already in one?
In most cases, it is not too late to shelter assets. The pre-eminent technique concerns the immediate annuity. An immediate annuity is a financial device that converts assets into income. If a spouse is in a nursing home, an immediate annuity can usually be employed to make him or her eligible for Medicaid, while preserving most, if not all, of the assets for the healthy spouse. The law states that the spouse at home can keep half of the countable assets, or about $117,000, whichever is less, plus the home. The funds above that level need to be spent down. The rules are very complex; in general, however, if the assets above the protected level are put into an immediate annuity, the nursing home spouse becomes Medicaid eligible and the healthy spouse can keep the annuity payments. In other words, all of the assets are protected. Under the new annuity rules, if the applicant is married, then the annuity must name the state as the remainder beneficiary in the second position after the community spouse or minor or disabled child.
So, in the proper case, an annuity can still be used to make someone eligible for Medicaid; it’s just that the state is the beneficiary if the spouse dies within the term of the annuity. If the person outlives the annuity, then the state will not receive anything from the annuity proceeds, and they can be inherited by the children. Therefore, there is nothing to lose in doing the annuity. That is, if the annuity is not purchased, then all of the countable assets are subject to being spent down. With the annuity, the person can immediately qualify for Medicaid, and there some or all of the assets will be protected. It is important to note that the subject of annuities is enormously complicated, and this article only provides a very brief introduction to the subject.
There are other techniques that can be used to protect assets, all of which are related to the particulars of the situation. The point to remember is that even if your loved one is already in the nursing home, do not lose hope. It is very often possible to protect a significant amount of assets.
In criminal law, you are innocent until proven guilty. A Medicaid application is just the opposite: you are considered ineligible for the benefits until you prove that you are, actually, eligible.
Whether this is intentional or not we do not know, but it seems that the application process is designed to be as difficult as possible. Essentially, a Medicaid application is a full and complete audit of all of your finances for the past five years. You are required to produce a complete set of your monthly or quarterly statements for this timeframe.
In New Hampshire, every transaction above $500 needs to accounted for, and in Massachusetts, every transaction above $1,000 or so needs to be accounted for. If you have closed any accounts or sold any assets in the past five years, you need to prove what happened to the proceeds. If you have given any gifts in the past five years (other than small Christmas or birthday gifts), you can easily find yourself disqualified for benefits. Certain Medicaid caseworkers have been known to request vast amounts of information with impossibly short deadlines. To make matters worse, a 2013 law in New Hampshire can make your power of attorney holder personally liable for your nursing home costs if he or she is negligent in the preparation of an application.
It is our belief that, except in the very simplest of cases, you should get professional legal help in preparing and filing a Medicaid Application. Our firm has done thousands of Medicaid applications over the past 25 years, and we can provide the help that you need.
Denied. Is there a more unsettling word than that when you’re planning for your future or for the well-being of a loved one?
This is a troubling reality: some Medicaid applications are denied. If that happens, you have the right to file an appeal. A Medicaid appeal is held before a hearings officer. The hearings officer is not a judge, but rather is an official who works for the appeals unit of the Medicaid agency. An appeal is not a second bite at the apple. Rather, the job of the hearings officer is to determine whether the Medicaid agency made a mistake in assessing the facts or a mistake in applying the law.
Although a Medicaid appeal is not exactly a trial, it is quite similar, in that there can be testimony of witnesses, exhibits, legal briefs and legal arguments. The state Medicaid agency will have an attorney to represent it. The burden is on you to prove that the Medicaid agency made a mistake. Therefore, in most cases, unless you have competent legal representation, the odds will be greatly stacked against you. Our firm has many years’ worth of experience in handling Medicaid appeals, and can provide representation in these cases.