The decision to move a family member into a nursing home is one of the most difficult decisions you can make. Perhaps the move is being made because your parent can no longer care for him or herself…or perhaps the person has a progressive disease like Alzheimer’s…or has had a stroke or heart attack.
No matter the reason, the family is almost always under great stress. Rising nursing home costs that can wipe out a family’s life savings quickly only add to the stress. The right decision can save tens of thousands of dollars while the wrong decision can cost your family everything. To avoid a common mistake many families make before getting advice, read the story of Harold and Joan.
After her 73 year old father, Harold, suffers a paralyzing stroke, his daughter Joan needs advice.
“The doctor says Harold needs long-term care in a nursing home,” Joan says. “He has some money in savings, but not enough. He doesn’t want to lose his house and life savings. I don’t know what to do.”
Joan has heard about Texas Medicaid benefits for nursing homes, but doesn’t want to waste her father’s life savings in order for Harold to qualify. Joan wants to ensure that her father’s medical needs are met, but she also wants to preserve Harold’s assets.
“Can’t Dad just give his money to me as a gift?” she asks. “Can’t he give away $12,000 a year? I could keep the money for him so he doesn’t lose it when he applies for Medicaid.”
Joan has confused general gift tax laws with the issue of asset transfers and Medicaid eligibility. A “gift” to a child in this case is actually a transfer, and Medicaid has very specific rules about transfers.
At the time Harold applies for Medicaid, for gifts made prior to February 8, 2006, the state will “look back” three years to see if any gifts have been made. Gifts made after February 8, 2006 will be subject to a five year lookback. The state won’t let you just give away your money or your property to qualify for Medicaid. Any gifts or transfers for less than fair market value that are uncovered in the look-back period will cause a delay in Harold’s eligibility for Medicaid.
In addition to the changes in the lookback period from three to five years, the new law also states that the penalty period on asset transfers will not begin until the Medicaid applicant is in the nursing home and already spent down. This will frustrate the gifting plans of most people.
So what can Harold and Joan do? They may be able to institute a gifting program, save a good portion of the family life savings, and still qualify for Medicaid. But they have to set it up just right. The new rules are very “nit-picky”. You should consult a knowledgeable Texas Medicaid Attorney on how this may be done.
Need a name of a Medicaid Attorney in Bexar County.
Dear Mr. Shea, My landlady is disabled and is currently in a type of residential/hospice setting and not expected to live more than a few months. Her daughter has asked me for some info about the Miller Trust. My landlady owns a home which I currently rent from her for $600 per month plus utilities. I am also disabled under SSA guidelines and I cannot afford to move. My landlady’s expenses for her care exceed her income substantially and her children currently have to pay the difference. Will a Miller Trust for her SSA retirement, annuity and my rent payments give her protections under the Miller Trust provisions? Her family is considering selling the home to me if I can afford it on my SSA disability check. Any help would be greatly appreciated. Many thanks. Chris
My mom has no property of anything of value. She does have retirement income (civil service $1302 and military reserves $545) and divorce property income (her 1/2 of my dad’s military retirement check $727.50) and her social security check is $117 per month. Can her divorce settlement be excluded from the eligibility? If so, I think she could qualify for Texas Medicaid benefits for nursing home.
I have her in a private non-licensed facility and she desperately wants a better place. She has stage IV colon cancer that has spread to her liver and lungs. She is currently under Hospice care.
Please advise.
Maggie
My son Joseph M. suffered a stroke on June 26, 2009 and all indicati;ons are that he is headed for long term care in a month or two is 30k gross short term care stops in Dec. then long term kicks in at about athe same rate. I don’t see how a Miller Trust can help since he is single. He is totally incapacitated and improving slowing – going home with him would be most difficult. Social Sec. is determining his disablity staus which should come athrough in a month or so…is reducing his income through legal means possible to qualify him for Medicaid?-
A Miller Trust can work if the Medicaid applicant is single or married. The key issue is if the Medicaid applicant receives too much income to be eligible for Medicaid benefits.
Every asset and source of income that is available to the Medicaid applicant is considered available. From the perspective of Medicaid eligibility, if an applicant’s income exceeds the limit the fastest way to fix it is with a Miller Trust which can be completed within a couple weeks generally. With income from a divorce, a long term option may be to modify it through the divorce court, but that will probably take longer and may cost more.
A Miller Trust does not “protect” assets or income. It is a tool to re-characterize income so that it is within the strict eligibility limits. A Miller Trust in no way increases the income or assets that a Medicaid recipient can keep, its only purpose is to restructure a person’s income to fit within the eligibility standards.
Responded to via email.
am looking for the DOWNLOAD of the application form! Where is it?
The Medicaid application can be downloaded on the following page as described above: http://texastitle19.com/texas-medicaid-application/