Elder Law – Questions and Answers

An elder law practice encounters various legal and social issues related to aging and disability.  We are often called upon to address, among other things, nursing home care and contracts, legal capacity, elder abuse, special needs planning, VA benefits and planning, Medicare and Medical Assistance and advocacy, estate planning and administration, trusts and trust administration, advance directives and powers of attorney, and tax planning.   Individuals and families often come to us after a major medical event or upon confinement to a hospital or nursing home.   Those who come early have often watched or assisted a family member, friend or neighbor through such life events.  Just about everyone presents with the same questions and anxieties.   Since these questions come up so often, we thought it might be useful to discuss them:

1. Will I be able to stay in my home if I get sick? This is often a medical issue.  The fact is, nearly nine out of ten patients who require long term care get it at home.  The patients who go to nursing homes go due to medical and personal safety issues.   Additionally, it depends on whether you can afford care at home.  It is sometimes as expensive to treat at home as it is to go to a nursing facility.  What is very helpful is the “Waiver” program in Pennsylvania, a pilot program from the Department of Public Welfare.  The Waiver program is available to low income Pennsylvania residents otherwise eligible for medical assistance who require nursing home care.  Unlike medical assistance, the Waiver program is not an entitlement.  It is administered by Area Agency on Aging in PA counties and there is limited availability.

2. Will the state take my home if I get sick and go into a nursing home? Contrary to popular opinion, the state does not take anyone’s home when they are admitted to a nursing home or receive long term care services under the medical assistance program.  There certainly are nursing homes who would like you to think it is true so you sell your home and they get more private pay money from you.  Some homes even ask for the deed to the home to provide security for the payment of their bill.   For most, if not all, medical assistance recipients, the home is an exempt asset so long as the applicant intends to return.  Almost all applicants, if you ask them, do intend to return home right up to the time of their death.  What can happen to the home is that, if the property is in the name of the applicant at the time of his death, medical assistance has a lien against the property.  This is why it is important to seek advice early on the proper way to hold assets in the event of a long term care confinement.

3. Can I give my kids money? Gifting has become a real problem for people applying for medical assistance (remember 75% of all nursing home residents will eventually need this benefit).  ALL gifts that exceed $500 in a month are totaled for the 5 years preceding the filing of an application for medical assistance.   The total is used to determine whether you are eligible for assistance.  For each $8,766.39 of money gifted (2014), an applicant is penalized one month of care.  Since you have to run out of money before you apply, this obligation falls to the family.   Bottom line – DO NOT GIFT MONEY.

4. Can I cash my CDs and hide the cash? When applying for assistance, one must “trace” their closed accounts.  If you cannot trace the path of the money, you are deemed to have gifted it – see Item 3 above.

5. Can I give away $10,000 [$12,000,$14,000 etc.] every year? No, this is a gift tax rule NOT a medical assistance rule. See item 3 above.

6. My husband is sick. Can they get to the money in my name?  Yes, all funds in either name or constructively owned by either husband or wife is included in calculating eligibility.  That is the case if you are married a month or 20 years.  It is also the case if you are separated for a month or 20 years.   It is also the case if you divorced your spouse around the time of his or her admission to a nursing home.  The state would likely ignore the divorce decree.   Prenuptial agreements are usually not honored either.

7. County nursing homes are the worst right? Contrary to popular opinion, they are generally the best facilities.

8. I don’t want to be on Medicaid because it is only for the poor. Nearly 75% of Pennsylvania residents in nursing homes are covered by the medical assistance program – a form of Medicaid.  It often provides more protections than being a private patient.

9. VA benefits do not generally cover long term care. If there is any mistake out clients make, it is not keeping up with the benefits available from VA or not having proper documentation of their service.  If you or your spouse served in the military during wartime, you should make sure you have your discharge records.   Waiting until you need benefits is not a good idea because it takes a long time to get copies.   If you served during WWII, many of those records were lost in a fire and it takes even longer to get these.   Do this ahead of time.