Elder Law Email Update

ROBERT CLOFINE'S
ELDER LAW EMAIL UPDATE

When someone needs nursing home care,

we make sure they don't lose their home and life savings

Issue No. 4

June 21, 2003

ALL IN A WEEK'S WORK

True Stories

I am often as to speak to local groups about elder law topics, (please contact me if your group needs a speaker) and one of the first things I mention is that I am Certified as an Elder Law Attorney by the National Elder Law Foundation. I mention it for two reasons. First, I am proud of the certification. I was the 6th Pennsylvania attorney to receive the certification and there are still fewer then 25 statewide. But the second reason is more important. That is, consumers need to know that they should look for a specialist when they have an elder law issue. Last week in the office was proof of that point. I dealt with four issues last week that few attorneys would have known how to handle.

Case #1-An Extra $14,000

In the first case, a woman came to me almost four months after her husband had entered the nursing home. She already owed the nursing home about $25,000. For starters, I immediately recognized that her husband might be eligible for Medicaid, but since we would be seeking retroactive coverage, we had three month deadline rapidly approaching. Next on the agenda was "crunching the numbers" to see if we would be eligible. As it turns out, based on the standard formulas used by the Department of Public Welfare, my client would have been required to pay $14,000 towards her husband's nursing home bills. Those formulas are based on an assumed 3% rate of return. Since conservative investments do not currently earn 3%, I successfully argued that my client should be able to protect all of the couple's resources. To boot, my client also got to retain $90 of her husband's social security each month.

Case #2--The Caregiver Child

In this case, a daughter came to see me about Mom. Despite all of her efforts to keep Mom at home, it was necessary to place Mom in a nursing home. The daughter had lived in Mom's house all of her life and cared for Mom for a number of years as Mom suffered through the earlier stages of her Parkinson's disease. Mom's only assets were about $8,000 in savings, some cash value in her life insurance and her house. The daughter was resigned to using all of her mother's funds to pay for her nursing home care and was getting ready to sell the home to help pay the costs.

I cautioned the daughter about selling the home. For starters, it's generally not wise to immediately sell the home when the nursing home resident has few other assets since they can quickly qualify for Medicaid even though they still own their home. In this case selling the house would have been a real mistake. You see Mom really wanted her daughter to get the house, and it would be possible if her daughter meets the requirements of the "caregiver child" exemption.

Under this rule, the law allows a parent to transfer their home to a child if (1) the child lived with the parent for at least 2 years before the parent entered a nursing home and (2) the child provided care that allowed the parent to remain in the home. I think the daughter in this case will qualify for this "caregiver child" exemption.

Case #3-Both Spouses in a Nursing Home

In the third case, dad asked for my help in protecting his $200,000 of savings when his wife entered the nursing home. Dad had already contacted the Department of Public Welfare and was told that all he got to keep was $90,660. With this allowance, he was concerned about how he would continue to pay his assisted living expenses when he also had to pay nearly $6,000 per month for his wife's nursing home care. Unfortunately, the stress got to dad; his health worsened and he was also admitted to the nursing home. While the prospects for dad's recovery and a return to assisted living were good, the financial concerns were heightened. The family was now paying close to $12,000 per month and they were more concerned about whether any money would be left if dad got well enough to return to assisted living.

I explained that the "spousal impoverishment" provisions that permitted dad to retain $90,660 as the community spouse, no longer apply once dad was admitted to the nursing home. As such, we were able to shift the couple's assets out of mom's name and qualify her for Medicaid. This and other asset protections strategies will ensure that dad has sufficient funds if he is able to return to assisted living.

Case #4-The Disabled Child

This is perhaps the saddest case of all. It's also a real lesson about seeking advice in a timely manner. In this case, Mom had been in a nursing home for 18 months. Mom's only child is an adult disabled daughter. Mom had already gone through $90,000, but she still had $30,000 in savings and owned the house were her disabled daughter was living.

I was happy to tell the family that they wouldn't have to pay another nursing home bill. You see the law allows a nursing home resident to transfer assets to a child who meets certain disability requirements. While this family was extremely happy when they left my office, they were also kicking themselves a little as they wouldn't have had to pay a single nursing home bill if they had sought my advice sooner.

These are true accounts of cases I handled last week alone. It serves as a good example of how a law office that assists with two nursing home placements a week is likely to be more up-to-date and knowledgeable than an office that helps with two per year.