Among Friends

[Abrowneyegirl]

I just spent a lot of time this morning trying to help a friend untangle a MESS.  The problem has being going on for months and she finally reached out for a shoulder to cry on.

Here is what I learned and thought I would pass on the help others.

Be VERY careful about moving a seniors money/assets 'around' in attempts to 'save peoples inheritences' and prevent using the money to provide for senior care.

The state and fed gov have caught on to this and the senior maybe left without benefits.

Brief story-

Years ago her aunt and uncle gave each of the children a portion of their farm/real estate so that now the aunt and uncle have no assets or money in their names.

The uncle now needs skilled nursing care and the aunt needs assisted living.  AND they have no $$ to pay because of the gifts they gave their children, now they are ineligible for Medicare/Medicaid.   The government wants the children to give the gifts back, of course none of them are in the position to sell the property they are living on to pay their parents back and until enough of they did this to meet the % the government is requiring the parents 90 and 93 years old are stuck- they need care that no one can or will pay for.

SOMEONE gave this family very bad advice!!!  

Now my friend and her relatives are trying to arrange of schedule of who the aunt and uncle are going to be living with for weeks at time with each child taking a turn to provide care for these poor seniors.

[Kachina624]

I've heard warnings about this before but it's good to remind people.  I'm sure it's not at all unusual for seniors to give away assets to make themselves appear eligible for senior care.  It's a really bad idea.

[tansy]

It's not just a bad idea, it's unethical.  It used to be a 5-year look back at what money and assets were given away.

[Mz iMac]

Transferring Assets to Qualify for Medicaid

"Congress has established a period of ineligibility for Medicaid for those who transfer assets. For transfers made prior to February 8, 2006, state Medicaid officials would look only at transfers made within the 36 months prior to the Medicaid application (or 60 months if the transfer was made to or from certain kinds of trusts). But for transfers made after February 8, 2006, the so-called "look-back" period for all transfers is 60 months.

While the look-back period determines what transfers will be penalized, the length of the penalty depends on the amount transferred. The penalty period is determined by dividing the amount transferred by the average monthly cost of nursing home care in the state. For instance, if the nursing home resident transferred $100,000 in a state where the average monthly cost of care was $5,000, the penalty period would be 20 months ($100,000/$5,000 = 20). The 20-month period will not begin until (1) the transferor has moved to a nursing home, (2) he has spent down to the asset limit for Medicaid eligibility, (3) has applied for Medicaid coverage, and (4) has been approved for coverage but for the transfer. Therefore, if an individual transfers $100,000 on April 1, 2013, moves to a nursing home on April 1, 2014 and spends down to Medicaid eligibility on April 1, 2015, that is when the 20-month penalty period will begin, and it will not end until December 1, 2016.

Transfers should be made carefully, with an understanding of all the consequences. People who make transfers must be careful not to apply for Medicaid before the five-year look-back period elapses without first consulting with an elder law attorney. This is because the penalty could ultimately extend even longer than five years, depending on the size of the transfer.

One of the prime planning techniques used before the enactment of the Deficit Reduction Act of 2005 (DRA), often referred to as "half a loaf," was for the Medicaid applicant to give away approximately half of his or her assets. It worked this way: before applying for Medicaid, the prospective applicant would transfer half of his or her resources, thus creating a Medicaid penalty period. The applicant, who was often already in a nursing home, then used the other half of his or her resources to pay for care while waiting out the ensuing penalty period. After the penalty period had expired, the individual could apply for Medicaid coverage."

FULL ARTICLE LINK

===========

Another interest article (LINK):

Some Do's and Don'ts of a Medicaid Spend Down

[Nuttmeg]

Now my friend and her relatives are trying to arrange of schedule of who the aunt and uncle are going to be living with for weeks at time with each child taking a turn to provide care for these poor seniors.

I do not feel sorry for the younger family. They took money and now have to pay.

If the family does not care for these old people they can be brought up on charges for elder abuse.

[chrystaltree]

Yes, this is a serious issue and people aren't aware of it.  At one time, seniors cheated the system to get benefits they were not entitled.  It was legal but it wasn't ethical.  They basically gave away their assets and property so that if they needed the state or feds to cover healthcare and nursing home charges, they would be eligible.  They would be "poor" but only on paper.  I do not think this applied to Medicare becauuse Medicare isn't based on income.  But Medicaid is.  A lot of programs for seniors are based on financial need.  Well, that doesn't work anymore.  People cannot "game the system" anymore by giving away property and assets, even if they did it many years in advance.  But they don't know that until they try to get need based benefits.  It only takes a few clicks on a computer to see what they did and they get denied.  And often, the children and grandchildren who they gave their assets to, can't or won't help them out now that they need it.  Yes, I know someone who found herself in that situation.  To be honest, I did not feel all that sorry for the woman.  She was a widow who inherited her parent's home and land and later her in-law's house and some money.  In her 70's when she was healthy anf fit; she "gave" the houses to her grandchildren and she "gave" a sum of money to her children.  6 or 7 years later after a stroke, she took a down turn and needed some home health services and was deemed to be ineligible due to the property she gave away.  I never saw the actually paper work, hubby did.  But the rationale was that if you give assets away or sell property for less than it's true value, you can't later claim to be poor and have the State or Feds take care of you.  That isn't estate planning.  

[Imadickens]

What a sad tale! We need to take care of our elders no matter what!  My mother lived with us for her last twelve years. She did not pay rent or have any legal interest whatsoever in our house! Yet, when she needed skilled nursing care for the last week she lived with Cancer, I had to jump through hoops to prove those facts! My parents gave to me when I needed it, as a young married woman! My mother helped with my kids, and gave as she could. I was hurt and angry that I had to spend so much time going back and forth to get documentation when I could have been with her!

My dh and I are seeing an elder law attorney so our children won't have to face this! God forbid parents give anything that has already been taxed to the children they love and reared instead of the government getting a few more pennies! Maybe, if they stopped giving so many parties  for Congress and stop sending them on all these retreats, the government wouldn't need our hard earned pennies!

[Imadickens]

@chrystaltree I agree, many people hide their assets. It's no different than Swiss Accounts! However, when my mother was dieing she needed to be moved to a skilled facility. She had insurance, but it didn't cover hospice care. The home we wanted for my mother wasn't covered, so I asked about paying out of pocket for it. I knew she had less than a month to live, on week as it turned out, but the facility wanted six months fee put down. I was willing to do it until they informed me the deposit was nonrefundable! I couldn't afford to lose over $60,000! I was forced to place my mother in a lesser facility, for which I agonize every day!

[Hellodemocrat]

Please make sure your atty is skilled in this matter.

We had one and messed up some of what we were trying to do.

and, cost us more money than we thought.

[athenian]

@Abrowneyegirl  The question to ask is what would have happened if they hadn't transfered the property?  They might have had to sell some or all the property to cover their expenses.  Their children surely lived somewhere when the transfer occurred; they would have remained there, or wherever they could pay for on their own.  So now, the children need to step up to care for their parents, even if they lose some of "their" property. 

What they did is so unfair, both to those who pay out of pocket, and to those who really need medicaid.