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. If you need assistance protecting everything the law entitles you to, then call The Shea Law Firm at (832) 592-7913 today to get started before it is too late.
For additional information on how to get through the Medicaid maze find out about Medicaid Eligibility.
It is scary if your spouse is in need of Texas Medicaid nursing home benefits. Nursing homes cost a lot of money that most people do not have available to spend in their retirement years. Fortunately, with good advice many couples are eligible to qualify for Texas Medicaid nursing home benefits without losing everything. Some couples can even keep all of their assets. Let’s look at the story of Tom and Helen:
Tom and Helen have lived in Houston their entire adult lives. Two weeks ago, Tom and Helen celebrated their 50th wedding anniversary. Yesterday, Tom, who has Alzheimer’s, wandered away from home while Helen was grocery shopping. The police found Tom wandering the neighborhood hours later and took him to a hospital. Tom’s doctor has just told Helen that she needs to place Tom in a nursing home where he can receive the level of care that he needs. Concerned about nursing home expenses, Helen together a list of their assets:
$ 5,000.00 – Checking Account
$ 50,000.00 – Savings Account
$ 50,000.00 – CDs/IRAs
$150,000.00 – Residence
In addition to their assets, Tom receives a Social Security check for $800 each month and Helen receives Social Security of $400 each month. Helen begins to research nursing homes to find the best one for Tom and soon discovers that the average cost of a nursing home is over $4,500 every month! Helen’s afraid that everything they have worked for their entire lives will be consumed by nursing home expenses and, even worse, she will be left penniless to pay for her own monthly bills in less than three years.
There is good news for Helen. Texas offers the Medicaid program to help pay for nursing home care expenses. It is possible that Tom and Helen will not have to lose everything they have worked for to pay for nursing home expenses. The process may take some time, but the results are usually worth it.
To apply for Medicaid, Helen will have to go through the Health and Human Services Commission (HHSC). If she does things strictly according to the way HHSC tells her, she may only be able to keep approximately one-half of their assets. The rest of their assets would have to be “spent down” before Tom would qualify for Medicaid benefits.
Helen would like to avoid the financial devastation that often accompanies a nursing home placement and chooses to contact an experienced Medicaid attorney to speak about asset protection. Her attorney fills her in on how in most cases there is an alternative to the traditional “spend down” for families that choose to protect their life savings. That is because federal law protects Helen so that she does not have to impoverish herself before Tom can receive Medicaid benefits and over the years attorneys have developed proven asset protection strategies for a variety of situations. Helen was at risk to lose over $50,000 to nursing home bills but with the help of her attorney she learned how to protect that $50,000.
The nursing home won’t tell you about this because they want to get paid their full rate. The HHSC won’t tell you about this because they want to delay eligibility as long as possible. I’m here to tell you that with the help of an experienced Medicaid attorney you may be able to protect everything, yes everything! You have to take the first step and get help before the next nursing home bill.
This is an example where knowledge of the rules and how to apply them can make a substantial difference in the outcome. Consult a Texas Medicaid Attorney regarding your rights if your spouse has applied or is expected to apply for Medicaid benefits. Call The Shea Law Firm at (832) 592-7913 and don’t spend any more money on nursing home bills than you have to.
This is just the tip of the iceberg. Find out more about Houston Medicaid Eligibility.