The other day, Lou called me about his dad, who had been living in senior housing for a few years. His health has deteriorated and he now needs nursing home care. Lou’s plan is to spend down the $80,000 his dad has left, applying it towards the nursing home bill. Sounds like a solid plan.
Lou wants help with the Medicaid application. I asked him about gifts and other transactions over the past 5 years, the Medicaid look back period. Lou was pretty confident he didn’t have a problem. He told me that he had set up an irrevocable trust and transferred a few thousand dollars into it shortly before Dad moved to the senior housing. Since it wasn’t a problem when he applied for the housing he figured it wouldn’t be for Medicaid either.
That’s where Lou got it wrong. While eligibility for senior housing is generally needs based, the rules are quite different from Medcaid. Government benefit programs can have very different rules. Next week I’ll explain exactly where Lou’s mistake was.