As individuals age, they begin to confront the possibility that they may need to be placed in a nursing home or retirement home facility to live out their final years. Paying for these facilities is expensive – sometimes thousands of dollars per month – but Medicaid will generally pay for these costs so long as the resident has assets and/or income below a certain threshold. In order to meet this threshold, some individuals will give property, money, or other assets they own to friends and family members so that they can report asset levels and income that are low enough so that they qualify for Medicaid nursing home coverage. You or your loved one must be careful in taking this route, however, as this method of qualifying for nursing home coverage can easily backfire.
Medicaid Transfer Rules
In general, if you transferred any property to a family member for no cost or sold a piece of property for less than it was worth within the five years immediately preceding your Medicaid application, then you may be unable to obtain Medicaid nursing home benefits for a specific period of time (you would still be able to obtain coverage for medical costs or home care, in most cases). The specific period of time is calculated by considering the value of the transferred or sold asset and dividing this amount by the average monthly cost of nursing home care in Ohio (which is approximately $6,400 per month). Making this calculation will yield the total number of months of ineligibility for Medicaid nursing home benefits. For example, suppose a person looking to apply for Medicaid nursing home benefits liquidated his savings account and gave the $64,000 in the account to her grandson. Dividing $64,000 by $6,400 yields the number ten (10). In this case, the applicant would be ineligible for Medicaid nursing home benefits for ten months after her application. If she wished to live in a nursing home during those ten months, she would need to pay for those initial eight months before Medicaid would begin paying benefits.
Avoiding the Harsh Transfer Rules
The Medicaid transfer rule is just one example of why it is important to speak with an experienced Ohio estate planning lawyer before making any significant transfers of property or assets to loved ones in contemplation of entering a nursing home facility. There are methods available in some cases where assets may not need to be exhausted or spent prior to qualifying for Medicaid nursing home benefits, but your attorney will need to review the facts and circumstances of your case before being able to provide you with advice as to how best preserve the value of your assets and estate while still obtaining the Medicaid benefits you need and deserve.
The Law Office of John C. Grundy is an Ohio estate planning law firm providing advice and counsel to individuals nearing retirement or contemplating entering a nursing home. We can help you take advantage of exceptions in the law that may allow you to preserve your estate and assets. Contact us by phone today at (330) 637-9030 or contact us online to learn how our knowledgeable estate planning attorneys can assist you.