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Last week we were discussing Carol, her mom and a very common disconnect we see when families speak with assisted living facilities.  The facility explained it’s requirement  that residents private pay for a certain period before being considered for one of it’s Medicaid slots.  Carol heard something entirely different, that as long as she meets that requirement, Mom will get New Jersey Medicaid. It’s easy to see why this happens.  First of all, the Medicaid rules are quite complicated.  The consumer is unfamiliar with them and the assisted living representative very often isn’t much more knowledgeable either.  There are strict income and asset requirements.  Assets must be spent down to less than $2000.  Income, however, can often be a permanent bar to New Jersey’s assisted living Medicaid program.  There is a strict income cap of $2130 per month – and that’s gross income.  If Carol’s mom has income that exceeds that cap, she will never be eligible for New Jersey Medicaid in an assisted living setting (although she could qualify for one of New Jersey’s nursing home Medicaid programs). We also can’t forget about the medical requirement.  Although Mom is in an assisted living facility, she must establish that she needs nursing

It’s a statement we hear frequently when someone calls our office with the following scenario.  Mom can no longer live at home alone so daughter, Carol, is exploring assisted living as an option.  She tours an assisted living facility and has a conversation with the Community Relations Director.  Carol asks the following question, “Do you take Medicaid?” The director tells Carol that they are a New Jersey Medicaid approved facility and then explains that residents are required to private pay for a certain period of years before becoming eligible for one of their Medicaid “slots”.  That time frame typically is 2 or 3 years.  Each facility sets its own policy and requirements.  But what Carol is likely to hear is something very different.   She tells me “the facility said if I pay for 2 years Mom will get Medicaid”. Now, although I wasn’t in the room when that conversation took place, if I was a betting man, I would bet the house that the director didn’t say that.    There is a disconnect and I can’t count the number of times this has happened.  The director is telling Carol about the facility’s private pay requirement.  “You must private pay for 2 years before

Last week we were discussing George’s dilemma.  Dad needs nursing home care but owns the home that he and Aunt Harriet are living in.  Is there a way for him to preserve the house for Harriet but avoid a New Jersey Medicaid lien and New Jersey Inheritance tax?  The answer is “yes”. A home can be transferred without resulting in a Medicaid penalty in certain rare cases.  One such exception is in the case where a sibling has an equity interest in the home and has been residing there for at least one year before the date that the other sibling entered the nursing home.  George’s ears perked up.  “It sounds like our situation”, he said.  “But, what does ‘equity interest’ mean?  Harriet transferred the entire interest to Dad”, he replied. I explained that the definition of equity interest is broader than simply ownership on the deed.  If Harriet has been living in the house, making it her home, she has an equity interest in it.  That would qualify for the exception.  Transferring the house to her could protect it from any New Jersey Medicaid lien and would avoid the inheritance tax she would have to pay if she, instead, receives it

George had been looking in on his dad and his Aunt Harriet for years.  They had been living together for at least 20 years, ever since his mother died, when Dad moved into Harriet’s home.  Now Dad was in rapidly declining health and would need nursing home care and Medicaid pretty soon.  I asked about Dad’s assets and that’s when George went into some detail about the house. George explained that about 15 years ago Harriet had creditor problems so she transferred the home to Dad.  He was concerned that now Medicaid would take the home.  I explained that as long as a family member remained living there New Jersey Medicaid would not force the sale of the home.  Dad could qualify for Medicaid and Harriet could continue to live there.  When he died, however, New Jersey, under its estate recovery laws, would place a lien on the home. I asked George about his Dad’s will.  He told me that the will does leave the house to Harriet.  I explained that should she survive his dad, Harriet would inherit the home.  But, she would need to pay New Jersey inheritance tax as a sibling.  I estimated the tax would be somewhere in

Last week we were talking about Brenda, who tried to apply for Medicaid for her grandfather, but ran into a snag.  She provided the New Jersey Medicaid caseworker with 5 years of financial records and was told that Granddad still had to spend down another $30,000 from accounts that Brenda never knew existed. When I looked at the statements Brenda gave to Medicaid, it was clear that the $30,000 in question was in two Uniform Gift to Minors Act accounts, which Granddad was acting as custodian for Brenda.  I asked her why she gave those documents to Medicaid and Brenda didn’t have a good answer.   “I just figured I would give them everything and they would tell me when he would be eligible and what I needed to do”, she replied. It’s a very common response.  Many people are under the erroneous belief that the Medicaid application process is a simple one.  “I know there is a penalty if we gift money but we haven’t done that.  We have legitimately spent down all the assets so we’ll just walk into the Medicaid office and tell them that, hand over everything and it will all be fine.”  Unfortunately, it rarely works out that