A Medicaid application for nursing home level services is not filed until your countable, available assets are below a specific limit. Transfers (gifts) and Trusts can be used in certain circumstances. When our attorneys are analyzing the laws and developing your asset protection plan, the two major issues in this regard are (1) whether the funds in the Trust continue to be countable assets, and (2) whether the transfer to the Trust causes a disqualification (called a “transfer penalty”).
A VA Special Pension application is also filed when the assets are below a certain level (and the uncompensated medical expenses reduce the income below a set level). If assets are transferred or placed in Trust, the issue is whether the funds continue to be countable as assets.http://www.benefits.va.gov/pension/
The fact is that certain plans that help you become eligible for VA Special Pension can make you ineligible for Medicaid, and vice versa. If you require care and plan to remain at home with the help of VA Special Pension, but then you need to move into a nursing home and apply for Medicaid because your assets have run out, you may find that you were eligible for the VA program, but now you’re not eligible for Medicaid.2014 VA Pension Resource and Trusts Chart
For example, if you are under 65 and your attorney writes a Special Needs Trust (SNT) for you and you transfer your assets to a properly-structured SNT, the transfer won’t cause a Medicaid penalty and the assets in the Trust won’t be countable. However, that Trust IS considered an asset for VA pension purposes.
Another example is that if an applicant transfers assets into an irrevocable discretionary trust written by his attorney, and the applicant is the beneficiary of the Trust, the Trust may not be an asset for VA purposes but it is certainly an asset for Medicaid purposes.
A third example is that if assets are transferred to a disabled child, the assets are no longer countable for Medicaid purposes, but if the disabled child lives in the applicant’s household, the assets remain countable for VA pension purposes.
The laws governing these programs are a dense confusing thicket and great care & legal advice are needed to protect your interests.
Call us for legal advice on long-term care planning, Medicaid and VA benefits … 732-382-6070