Medicaid and Joint Accounts

March 5, 2004

Often seniors who may be potential Medicaid applicants are under the mistaken impression that if they add their children’s names on the title to their financial accounts (banking or brokerage) that this is considered giving up control of some or all of their money and that at some point, it would be protected if they needed Medicaid. This is not necessarily so. If the money in the account actually belongs to the client, making that account joint with a child or even adding that child as the primary account holder joint with the client using the child’s social security number will still not be considered a relinquishment of control by the client for Medicaid purposes. There are certain ways to effectively move these assets out of the senior’s name: 1. If, by chance, some or all the money in the joint account actually does belong to the child instead of the seniors and proof of this is available for offer to the Dept. of Social Services, and the senior’s name is removed from the account prior to the month the senior needs Medicaid, the portion belonging to the child will not be counted as a resource belonging to the senior. This involves careful record keeping over the years. 2. If all of the money belongs to the senior, to remove the account from the senior’s name, the account should be retitled in the children’s name only with their social security numbers. The senior’s name should not appear on th title of the account, and the account should not be held in trust for the senior or be payable on death to the senior. This is considered an uncompensated transfer and will incur a period of Medicaid eligibility for the senior based on the size of the account starting the month following the date of the transfer. 3. Where the senior has ccreated a joint account with a child already, a transfer to that child occurs when the senior removes his or her name from the account. Again, a period of Medicaid ineligibility will start running in the month following the date the senior’s name is fully removed from such account. 4. If the senior has a disabled child who is not on SSI, all of the senior’s resources can be transferred to that child alone without incurring a period of Medicaid ineligibility for the senior and without jeopardizing the child’s SSI. It is highly recommended that any of the above transfers be made under the supervision and upon the recommendation of an Elder Law attorney as part of an overall estate plan, especially if any of the financial accounts contain highly appreciated assets.