Guidance issued on ABLE Accounts, Medicaid and SSI
The Centers for Medicare and Medicaid Services (CMS) has finally issued some guidance on the use and funding of ABLE accounts for individuals with disabilities, and guidance on the way the ABLE statute intersects with the strict financial requirements of the Supplemental Security Income (SSI) and Medicaid programs. The federal statute (the ABLE Act) created an opportunity to create a fund to...
Elder penalized for wages paid to family caregiver, due to insufficient evidence
When a person applies for Medicaid to pay for home care or nursing home care, a penalty will be imposed if assets were given away during the preceding five year “look-back” period. There are numerous regulations in federal and state law concerning “uncompensated transfers,” which are gifts. A “gift” is distinguished by law from a “payment for goods...
Residence in Nursing Home not sufficient to defeat claim for Elective Share
The Medicaid program determines eligibility for a married applicant based on the amount of resources owned by the applicant and his spouse. If the community spouse dies first, the program will count as a resource the amount of assets that the surviving spouse is entitled to receive from the Estate to satisfy his claim for the “elective share.” If the individual fails to pursue his...
Medicaid penalty imposed when life tenant received no proceeds of the home sale
A “life estate” in property is an interest that has a quantifiable value. If ownership of property can be thought of as giving the owner a “bundle of rights,” the life estate is a partial ownership of that bundle. For instance, the owner of property has the right to sell it, improve it, demolish it, rent it, give away a partial interest, and reside in it. The life...
A disinherited spouse could have a medicaid problem
When a person applies for Medicaid benefits, a five-year look back is done by the county board of social services to see if the applicant had given away any assets that they owned or to which they were entitled. If that occurred, it’s referred to as a “transfer of assets” or “uncompensated transfer of assets,” and the result will be a penalty period in which the...
Changing a Trust to reduce your access to funds can cause a Medicaid transfer penalty
In Maurice Needham vs. Director of the Office of Medicaid, the Massachusetts Court of Appeals upheld a transfer penalty imposed by the State Medicaid program after the Medicaid applicant obtained a court order amending his trust. There was a revocable Trust containing Needham’s house, and an irrevocable Trust for Needham’s benefit which was the sole beneficiary of the revocable...
Third Circuit rejects State’s claim that short-term annuities can’t meet Medicaid requirements
The Third Circuit federal Court of Appeals has just issued a precedential decision concerning Medicaid planning strategies that involve the purchase of short-term, immediate, irrevocable, unassignable annuities. Zahner decision The case is called
ANABEL ZAHNER, by her agent Raymond E. Zahner; ESTATE OF DONNA C. CLAYPOOLE, by Mitchell R. Claypool, Executor; CONNIE L. SANNER, by her agent Jamie...
Be sure to fund your Special Needs Trust before age 65
“Special Needs Trusts” are a specific type of Trust which is referenced in the Social Security Act at 42 USC 1396p(d)(4)(a) (regarding Medicaid) and at 42 UC 1382b(c)(1)(C)(ii)(III) (regarding Supplemental Security Income . http://www.socialsecurity.gov/ssi/spotlights/spot-trusts.htm These are first-party trusts, also called grantor trusts. They are for the sole benefit of a person...