Listen to Lawrence…The Need for Advance Planning/Answering Medicaid Questions

Dear clients and friends,

Well, the day is finally here. We have been anticipating (and dreading) the first day of October for many months now. Today is the first day that we now have a 2 ½ year look back for Community Medicaid. This means that should you need aides to come into your home to take care of you or other long term care services, you will no longer be able to simply transfer your assets out of your name at the last second and qualify for Medicaid. Since this is the new reality, the only way to get Community Medicaid eligibility is to get your assets out of your name and then wait out the look back period.  Advance planning is now more important than ever to protect your assets, although assets can still be freely transferred between spouses.  Advance planning may now mean that an Irrevocable Medicaid Trust is a tool in the tool shed you should consider.

READER QUESTION:

My mom passed away this May in a nursing home. She was on Medicaid, pending guardianship for 11 months which was initiated by the nursing home. Mom passed before guardianship ever became final during Covid when courts were closed, then backlogged with cases. Can Medicaid put a lien on her estate now that she has passed? Thoughts, please. Thank you.

MY RESPONSE:

I assume by these facts that Medicaid was paying for your mother’s nursing home care even though she had assets in her name. Having assets in her name would ordinarily disqualify her from Medicaid, but for the fact that she was incompetent and no one had access to her assets to pay the nursing home, thus the need for the guardianship. In such cases, Medicaid will be approved provisionally. Once the guardianship is approved, the amount Medicaid paid would have to be reimbursed. Here, however, your mother died before the guardianship was approved; upon your mother’s death, the guardianship would be dropped. Nevertheless, Medicaid has the right to reimbursement from your mother’s “estate.” On the other hand, if the assets in your mother’s name designate a beneficiary, these assets would pass outside her “estate” and it may prove difficult for Medicaid to seek reimbursement from the beneficiaries.

I hope this helps! Please forward this infomation to your friends and relatives.

As always, please send me your questions. If you are thinking about it, others are probably too, so my answers will no doubt help you and many others.

Let’s stay connected.

LISTEN TO LAWRENCE

Stay safe!