Yesterday, all my troubles seemed so far away – The Beatles’ classic song about regret rings all too true among those in a nursing home crisis. What seemed like a good idea at the time becomes a huge problem when people give gifts or make transfers just before they go to a nursing home. We see it all too often. Each day we meet families who are misinformed about how the look-back process works.
What is the look-back?
When applying for Medicaid benefits, we don’t just give a snapshot of what your finances look now; we give a complete picture of the last five years. This requires gathering five years’ of tax returns and financial statements, from banks, brokerage accounts, and insurance companies. When the state determines a transfer occurred in that five-year period, they assess a “restricted coverage period” based on the value of improper transfer. Once you are down to $1,500 in Ohio, you have to serve a penalty period, also known as the “restricted coverage period.” Despite not having money available to pay for care, you are ineligible for Medicaid assistance during that time period.
What can I do to avoid the penalty period?
The best way to avoid this problem is to stop gifting away assets as you progress into your retirement years. We get it. You want to start sharing with your children or grandchildren. Problems occur, however, when checks are made out to kids or grandkids, or when dad deeds the farm over to the sons because he isn’t farming it anymore. These types of transfers may be possible, but they must be done with careful planning supervised by an elder law firm like AlerStallings. The most common trouble we see is when a professional – often a financial planner, an accountant, or a lawyer without experience in this field – give bad advice because they don’t understand the intricacies of the Medicaid rules.
What if I’ve already made transfers?
You need to call us immediately. With careful planning, we can often account for improper transfers made in the past. Of course, it depends on the specifics of the situation, but the sooner we deal with the problem the more assets can be protected.
How can an attorney help with Medicaid?
At AlerStallings, we’ve helped hundreds of families deal with a loved one needing care. If you are considering making a gift, whether to help out a struggling family member or just out of generosity, you’ll want to talk to us to ensure you don’t put yourself in a bind. We can also help with planning for a possible long-term care stay that is still over the horizon. Building a plan that takes all of the possible outcomes into consideration is a common solution we provide. If you think it may be too late and you’re facing a nursing home crisis, we can still help.
If you have more questions or want to learn more, schedule a consultation or reserve your place at an event today.