Transfers of Assets Affect Medicaid

New Jersey Medicaid planning lawyerIf a Medicaid applicant is married and his or her spouse resides in the primary residence, then the home is an exempt resource. The spouse is entitled to keep resources of $120,900. The applicant must have less than $2,000. Any additional resources above these limits must go toward the cost of his or her nursing home care. If the applicant has a spouse, he or she may retain a portion of the other spouse’s income under certain circumstances.

Medicaid eligibility is based on an individual’s resources. This means that in order to be eligible, an applicant is required to have less income and access to assets in order to receive benefits. The income requirements differ depending on the type of Medicaid benefit.

If a Medicaid applicant is married and his or her spouse resides in the primary residence, then the home is an exempt resource. The spouse is entitled to keep resources of $120,900. The applicant must have less than $2,000. Any additional resources above these limits must go toward the cost of his or her nursing home care. If the applicant has a spouse, he or she may retain a portion of the other spouse’s income under certain circumstances.

Medicaid has a five-year look-back period. In terms of the five-year look-back period, all financial information must be disclosed for the five-years prior to entering the nursing home. If any assets were transferred out of the applicant’s name during that five-year period, there will be a penalty unless the transfers are deemed to be exempt. Exempt transfers are those to a spouse, those to a disabled child, or those made to a caretaker child.

Spousal refusal is a Medicaid planning option where a community spouse, that is the spouse living at home, cannot afford to live on the allowances that Medicaid provides. The process begins by shifting assets into the community spouse’s name and a document is prepared by an attorney indicating that the community spouse refuses to contribute income and assets to the care of the institutionalized spouse because he or she needs it for their own upkeep.

A caretaker child is a person who lives with his or her parent for two years prior to the applicant entering the nursing home and the child provided care to the parent during that time and resided with them for one year prior to entering the facility.

A transfer that is not deemed to be exempt will create a period of ineligibility for Medicaid benefits. It is important to consult an experienced elder law attorney who will assist you in establishing an estate plan that will serve your needs, as well as to plan ahead in order to alleviate the financial burden of nursing home care.

The experienced elder law and estate planning attorneys at the Law Offices of Hunziker, Jones, & Sweeney help seniors and their families handle all aspects of New Jersey Medicaid planning. Our New Jersey Medicaid planning lawyers can answer your questions about planning for Medicaid, and assist you along the way. For more information or to schedule a consultation, contact our New Jersey Medicaid planning lawyers at (973) 256-0456.

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