Fredrick P. Niemann

Fredrick P. Niemann, Esq., a Medicaid Attorney

So, in last week’s blog I presented a common scenario, Mom and Dad both needing long term care and nothing but a house left in their names.  The children are paying for their care.  We get Dad on Medicaid first. 

Now we work on getting Mom into a nursing home and then apply for Medicaid for her.  The home will have to be sold (unless there is a family member living there but we’ll address that exception in another issue)  but it won’t hold up Mom’s Medicaid, which is important, since it not so easy these days to sell in a what is a down market.  Once the home is sold Mom will lose her eligibility for Medicaid and will need to private pay from the proceeds of the sale.  She also could keep her Medicaid eligibility and pay the proceeds to the State to reimburse it for benefits paid up till that point.  Which option is better depends on how much is realized from the sale and how much is owed to the State.  But, keep in mind that the State pays the nursing home at a lower rate than you or I would pay (approximately 50% less).

And, what about the money that the children paid out of their own pocket for Mom and Dad’s care?  They can be reimbursed from the proceeds once they sell the house.  However, everything must be documented because Medicaid presumes that transfers between family members are gifts, not loans.  If it is a loan then there must be a written agreement.  The best practice is for there to be a recorded mortgage.  At the closing the mortgage is paid off and a discharge is recorded by the Buyer’s attorney.  The children are reimbursed directly and there is a record as far as Medicaid is concerned.

In the end, the parents are paying for their care from their own assets, the children are paid back (money which they will need for their own retirement and long term care needs) and depending on how much long term care is needed and what the home sells for, there may even be some amount left to transfer to the next generation in the form of an inheritance, after the State is reimbursed for benefits they paid out on Mom and Dad’s behalf.

For further information and advice in any Medicaid matter, do not hesitate to contact me at 732-863-9900 Ext. 101 or 105, or fniemann@hnlawfirm.com.

Fredrick P. Niemann, Esq., a Medicaid Attorney

Mom and Dad are still living in their home which they own.  They both need round the clock nursing home level care and have home health aides living with them.  This has been going on for a number of years and they have spent down much of their assets on care and maintaining the home.  Now the children are spending their own money with no end in sight.  They want to sell the home but in today’s economy and real estate market that isn’t as easy as it once was.  Their current predicament is taxing on the family, both financially and emotionally.  Last week I talked about a reverse mortgage as a possible solution.  Is there any other way out?

Actually, there is.  There is a way to move both parents into a nursing home, get them on Medicaid and reimburse the children for monies they paid for their parents’ care.  Medicaid rules are very complex and the timing of each step in the process is critical but it can be done.  Here’s how it works.

The first step is to get one of the parents into a nursing home.  Let’s say it is Dad.  If he is in the hospital already (often the case when we get the call) then he should be transferred from there to the nursing home.  We then apply for Medicaid.  The house is an exempt asset (ie., not a countable asset for Medicaid eligibility purposes) since Mom is still living there.  Once we get Dad approved for Medicaid there is what is called a “division of assets”.  Whatever is Mom’s is now hers, to be spent on her care but not on Dad’s.  This is the key.  In next week’s blog I’ll discuss the next step, getting Mom on Medicaid.

For further information and advice in any Medicaid matter, do not hesitate to contact me at 732-863-9900 Ext. 101 or 105, or fniemann@hnlawfirm.com.