1. The Senior is married — Unlike other areas of law, Medicaid does not care how your assets are titled. Medicaid does not care if there is a prenuptial agreement. This means that any asset held by either spouse is going to be counted as a resource for Medicaid spend down purposes. This can have a devastating impact for second marriages. Only by planning before a Medicaid application is submitted can resources belonging to one spouse be protected.
2. The Senior divorced within the last 5 years — Medicaid looks back at all assets of a couple for the past five years. If the divorce was amicable and there was a division of assets, Medicaid can say that the Senior in the nursing home gave away too much and penalize that spouse.
3. The Senior has assets exceeding $2,000 — Anytime a Senior going into a nursing home has assets, legal help is needed. There are options to spending down the assets. Significant assets can be preserved for the use of the Senior instead of having to spend down for nursing home care.
4. The Senior has made gifts to family members or other individuals — Medicaid does not allow for any gifting within the past five years. If gifts have been made (either by cash or by check), legal help will be needed to rectify the situation. If fraud has been perpetrated upon the Senior (i.e., a family member or other person is taking money), legal help will also be needed to keep Medicaid from penalizing the Senior for the transfers.
5. The Senior has made loans to family members or other individuals — Medicaid will not penalize for loans; but, Medicaid requires that the loans be repaid; otherwise, the “loans” are actually gifts. Seniors often say they have not made any gifts; but, then a “loan” that has never been repaid is discovered. This can be a serious problem for the Senior.
6. The Senior has paid any bills for family members or other individuals — Again, sometimes Seniors will say they have made no gifts or loans; but, there are payments in their bank records for things that are clearly not theirs. Ultimately, it is determined that they have been making the car payment for their son or granddaughter, etc. This will also be a serious problem for the Senior.
7. The Senior owns real estate — As stated above, this requires fast planning if any asset protection is to be done.
8. The Senior cannot account for all assets within the last 5 years — Medicaid requires a Senior to verify what happened to any assets that were transferred, cash withdrawals, and other vague transactions that occurred during the past 5 years. Examples can range from gambling losses, to taking large cash withdrawals each month to buy everything with cash.
A lawyer can identify areas that will cause problems for the Senior’s application and assist in rectifying the mistakes quickly. Further, a lawyer can often save substantial assets for the use of the Senior and his or her spouse.
Editor’s Note: Melanie B. Bradford is an attorney located in Scottsboro, Alabama at 803 Garland Ferry Road at the intersection of Veterans Drive and Garland Ferry near The Daily Sentinel. Her phone number is 256-259-3301. The Alabama State Bar requires any communication that may be interpreted as an ad to state: “No representation is made about the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers.”