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May 12
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What is the Caretaker Child Exception?

By Uncategorized

Caretaker Child Exception

You can receive Medicaid coverage while still keeping an ownership interest in your home. However, at your death the state will have the right to recover from your probate estate—essentially your home—whatever it pays out for your care. Your home could escape this claim if it were transferred to one or more of your children. A problem with doing this is that under the general transfer penalty rule, you would be ineligible for Medicaid benefits for up to 60 months following the conveyance.

Children who care for their parents can take advantage of provisions in the Medicaid Regulations

The Caretaker Child Exception to the transfer penalty can be a valuable tool to preserve the home of parents.

However, an exception to the transfer penalty allows a Medicaid applicant to transfer his or her home to a qualified caregiver child. The law defines a caregiver-transferee as a child  of the Medicaid applicant “who was residing in the applicant’s…home for a period of at least two years immediately before the date of the applicant’s…admission to the institution, and who (as determined by the DHS) provided care to the applicant…that permitted him or her to reside at home rather than in an institution. “ In order to qualify under this exception, an applicant should be prepared to submit a certification by his or her attending physician which basically states that, but for the caregiver, the applicant would have had to move to a nursing home.

If you can get the necessary certification, and if you would feel comfortable with the property in your caretaker’s name solely, it is recommend that you transfer your interest in your home to your caretaker child. No transfer penalty would be triggered and, in addition, the unit would not be subject to any reimbursement claim by the state. Once the transfer is made, your caretaker child would be free to sell the house or simply rent it out. If you choose to transfer the house to your caretaker child, you should discuss the form of conveyance—trust, life estate, or outright ownership—and the tax consequences to each approach.

If you decide to make the transfer, you will have the option of doing so after you qualify for Medicaid, or before you submit the application. To make the transfer before you have qualified for Medicaid may prolong the application process. For that reason, it may be easier to make the transfer after you have been determined eligible for Medicaid. However, we have submitted applications where the home was transferred before and after and all were approved.

Want to discuss how to take advantage of the Caretaker Child Exception with your family? Call us to schedule a no obligation consultation.

May 11
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Home Based Medicaid Serivices

By Uncategorized

LTSS in Home and Community-Based Settings

Many older adults and people with disabilities who want to stay in their own homes cannot do so without help. The programs that can help you or someone you care for live comfortably and safely at home are called Home and Community Based Services.

Some programs can help you fill prescriptions or get meals or rides. Other programs will help you out at home with activities like personal grooming or getting in and out of bed. The programs you use will be based on your needs.

Medicaid LTSS provides medical care and covers most of the services and supports people need to stay in their homes or a community-setting. People who have the highest or high level of need may get Medicaid LTSS in the home or community setting.

Need to apply for LTSS Medicaid home waiver for a loved one? Contact us.

Jun 21
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Home Placed In Massachusetts Trust Protected

By News

Ability to Use House Placed In Massachusetts Trust Does Not Render Trust Available

Reversing a lower court, Massachusetts’ highest court rules that two Medicaid applicants’ trusts were not available assets even though the applicants retained the right to use the houses that were put into the trusts. Daley v. Secretary of the Executive Office of Health and Human Services (Mass., No. SJC-12200, May 30, 2017) and Nadeau v. Director of the Office of Medicaid (Mass., No. SJC-12205, May 30, 2017).
James and Mary Daley created an irrevocable trust. They conveyed their interest in their condominium to the trust, but retained a life estate in the property. Seven years later, Mr. Daley was admitted to a nursing home and applied for Medicaid benefits. The state denied him benefits after determining that the trust was an available asset. Lionel Nadeau and his wife created an irrevocable trust and transferred their house into the trust. The trust provided that the Nadeaus had the right to use and occupy the house, which they did until Mr. Nadeau entered a nursing home and applied for Medicaid benefits. As with the Daleys, the state considered the trust a countable asset and denied benefits.

The Daleys and the Nadeaus appealed but following hearings, the state ruled that the trusts were available assets because the Daleys and Nadeaus had the right to occupy and use the properties that were in the trusts. In separate rulings, Massachusetts trial courts held that both trusts were available assets. [Daley v. Sudders, Mass. Super. Ct., No. 15–CV–0188–D; Dec. 23, 2015; and Nadeau v.Thorn, Mass. Super. Ct., No. 14-DV-02278C, Dec. 30,2015]; see The ElderLaw Report, March 2016, p. 5.) The Daleys and Nadeaus appealed and the Massachusetts Supreme Judicial decided both cases together.

The Massachusetts Supreme Judicial court reverses, holding that the trusts are not available assets. According to the court, “where a trust grants the use or occupancy of a home to the grantors [as in the Nadeau’s case], it is effectively making a payment to the grantors in the amount of the fair rental value of that property.” The court adds that these payments “do not affect an applicant’s eligibility for Medicaid long-term care benefits, but they may affect how much the applicant is required to contribute to the payment for that care.” In the Daleys’ case, the court rules that because the Daleys hold a life estate, their use of the home is not considered income and “the continued use of the home by the applicant pursuant to his or her life estate interest does not make the remainder interest in the property owned by the trust available to the applicant.”

Maryland elder law attorney Ron M. Landsman joined the briefing and argument. In reaching its conclusion in the Daley case, the court cites the Elder Law section of West’s Massachusetts Practice series, written by Harry S. Margolis and Jeffrey A. Bloom of the Boston firm of Margolis & Bloom, LLP. For the full text of this decision, go to: http://tinyurl.com/elr-Daley3

Jan 13
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4 Reasons To NEVER Give Your Home To Your Children

By Uncategorized

Many people plan to continue to live in their home as long as they are able to do so. If they eventually ever have to go to a nursing home, your house and its contents would NOT have to be sold in order to qualify for Medicaid. However, it is still at risk because the state has a right to recover whatever it pays for your care from your probate estate. Your home may be protected from such estate recovery by keeping it out of your probate estate.

The simplest approach to doing so would be to deed it to your children. There are four problems with doing this:

  1. You lose control over your house. Your children now are the tile owners of the home and as such it would be subject to and vulnerable to your children’s debts or if they were sued or divorced.
  2. This would be a transfer which would make you ineligible for Medicaid for the following 60 months.
  3. Your children would lose the opportunity of getting a “step-up” in basis by receiving the property through your estate. Your children would be subject to potential capital gains taxes that could be avoided.
  4. Selling the home later can become problematic. Many clients expect at some point to need to sell their home and possibly downsize. By transferring the home to your children you have added complexity with title issues and taxation issues with any sale.

So how do you keep the house out of  your probate estate so that the state has no access to place a lien on it? How do you ensure your heirs get a stepped-up basis in the house? How should you own the house that allows for a ease of downsizing? There is one SOLUTION: using the Irrevocable Income Only Grantor Trust.

This trust allows you to keep the property out of your children’s hands, allows them to received a step-up in basis, allows you the freedom of selling the property without a hassle, avoids estate recovery and five years after the transfer is completely protected for Medicaid.

Want to lean more? Contact our office for a free consultation.elderly-couple-in-front-of-home-960x683

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