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Last week I started to tell you about the Medicaid estate recovery process in which the State attempts to recover from the estates of deceased Medicaid recipients, benefits it paid out. The process is usually pretty routine. The State runs a printout, which shows the dates and amounts it paid. When a Medicaid recipient is in a facility, the cost charged by the facility is at a reduced Medicaid rate. Additionally, the Medicaid beneficiary must apply most of his or her income to the cost, so the State rarely pays the full amount of that rate. In order to be Medicaid eligible, an applicant must have less than $2000 in assets to his or her name so you would think that the State's effort to recover money is a fruitless effort. There are, however, many ins and outs to the Medicaid regulations. In our particular case, because our client was under age 65, we were able to place his home into a special needs trust without spending it down towards care at the much higher private pay rate. This strategy allowed him to qualify for Medicaid's reduced rate. After death some of the proceeds from

Medicaid's estate recovery law requires state Medicaid offices to attempt to recover paid benefits from the estates of Medicaid recipients after they die. New Jersey takes an expanded definition of estate, which includes probate assets (those passing by way of a will or otherwise thru the estate administration process) and non-probate assets such as those held in certain trusts. A Medicaid applicant must have less than $2000 in assets to his/her name to qualify for and maintain Medicaid eligibility, so you might think that there shouldn't be much to attempt to recover. You'd be wrong. The Medicaid laws, rules and regulations are complicated and there are many exceptions under which assets that are subject to estate recovery do not prevent a person, while alive, from qualifying for Medicaid. At the same time, once the estate recovery process is reached there are no real disputes as to what the State should be looking to recover. For the first time in our office, however, we discovered that a mistake did happen when we got to the estate recovery process. Next week I'll share more.

In this week’s post I will review the updated numbers for 2023 for the VA program that provides a benefit to wartime veterans and their spouses. Known as the VA Aid and Attendance program, this benefit provides a special pension to eligible applicants who need long term care. The maximum pension amount is tied to the same cost of living adjustment as Social Security, which for 2023 is 8.7%. For a single veteran with no dependents the maximum pension one can receive goes up to $2229 per month. For a married veteran the maximum for 2022 will be $2642. For a widowed spouse who needs care the 2022 max will be $1432 per month. The Aid and Attendance program is a needs based benefit. This means that to be eligible one must meet a financial test. Different than Medicaid, the VA uses a net worth test. It calculates the applicant’s (in the case of a married couple both spouse’s) annual income and adds that to the countable assets. This is known as the net worth. For 2022 the net worth must be no more than $150,538 to qualify for this benefit. Existing VA A&A recipients should have received a letter from the

Last month in this blog I updated you on some of the new Social Security and Medicare numbers for 2023. The recently announced cost of living adjustment (COLA) of 8.7% has resulted in another big jump in benefits for the second year. Many other federal programs are tied to the Social Security COLA. These include Medicaid and the VA Aid and Attendance programs. This week we will review the 2023 Medicaid numbers. Medicaid's programs that cover long term care have a strict income cap or limit. For 2023 that number is $2742 per month. Anyone with more than $2742 per month of gross income (before taxes, Medicare and health premiums are deducted) must use a Qualified Income Trust in order to qualify for Medicaid. Medicaid recipients must also have less than $2000 of countable assets. A home is an exempt asset up to a certain limit as long as the applicant is living in it. In 2023 the limit is $1,033,000 of equity. Anything above that amount is countable. For a married couple where at least one of the spouses is living in the home there remains no limit. In other words,

In my blog post last week, I told you about a number of cases in our office in which we were contacted to help with a real estate closing that was delayed at the last minute.   Shortly before the closing it was discovered that the person who signed the real estate contract didn’t actually have authority to complete the transaction because he or she didn’t own the property.  The owner is deceased so only the executor of the will or - if there is no will - the appointed administrator has the authority to sell and then distribute the proceeds to the rightful heirs.  So, why doesn’t this important fact come to light sooner?  A general lack of knowledge about probate and the estate administration process is probably the reason.  As I explained last week, most people are unaware of the Surrogate and what that  office does.  But asking questions at the beginning of the real estate sales process can avoid the scramble to hold a transaction together. For example, the realtor for the seller usually knows at the time he or she is hired that the owner has died.  The realtor should immediately ask the client for a copy of the Surrogate papers.  If the realtor gets a confused

Real Estate Sale After Death (Part 1) In recent months we have had a number of calls coming to our office with the following problem.  The caller explains that he or she is attempting to sell a home owned by another family member.  A buyer is found but then shortly before the closing the sale hits a snag.   The buyer’s title company does a search and discovers that the deed shows the owner to be someone who has died.  The company asks for Letters Testamentary (if the decedent had a will) or Letters of Administration (if there was no will) proving that the person selling the property has the authority to do so.  If none was obtained, the title company will not insure the title.  If the buyer is financing the purchase with a mortgage the bank won’t approve the loan without a title policy.  Even in an all cash deal a buyer will not go ahead with the sale because the “seller” does not have authority to complete the transaction. So how does this happen?  No one realized that when the owner died, a legal process was necessary to determine who has the authority to sell the property as well as to determine the person(s) entitled to the proceeds