A Nursing Home Doesn't Necessarily Mean Impoverishment - JuniperCivic.com
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Originally published in the June 2003 Juniper Berry Magazine

A Nursing Home Doesn't Necessarily Mean Impoverishment

Your elderly father just had a massive stroke. He will survive, but your mother, also in frail health, is unable mentally or physically to care for your father at home. A nursing home seems to be the only alternative, but any nursing home you investigate costs about $9,000 a month.

Your parents are middle class. They worked hard to pay off their mortgage and save a few hundred thousand dollars. Does your mother face a life of poverty? If your father gives everything away, does he have to wait three years before applying for Medicaid? Not necessarily. There are options available.

If your father is able to transfer his assets to his wife, he will be able to qualify for medical assistance (Medicaid) on the first day of the month after he transfers his assets to his spouse. There is a three year look back period when a person applies for medical assistance to pay for a nursing home bill. This means that all of your financial transactions and gifts over $1,000.00 for the three years prior to the application must be disclosed and explained to Medicaid, but as we've said before, assets transferred to a spouse are exempt. Even if the person applying for Medicaid is not married, some gifts can still be made, if they are done according to a state approved formula.

You may ask what can be done if the stroke left your father incompetent to transfer his assets to his wife? If your father signed a properly drafted durable power of attorney before his stroke, then his appointed agent (usually a family member) could make the transfers for him. If he had signed such a power of attorney, the family may not have to go to court to have a guardian appointed to make the transfers. This can be expensive, especially if the family is paying $9,000 a month, until the judge signs the appropriate order.

Michael N. Connors is the founder and principal attorney of Connors and Sullivan. P.C., an elder law, estate planning, and estate administration law firm. Mr. Connors has over twenty years experience with Nursing Home and Medicaid Planning. Initial consultations are free of charge and offices are conveniently located in Brooklyn, Manhattan and Queens.