Full question:
a irrevocable A-B Trust was set up in 1989 it has a medicaid trust clause that protected the assets of that trust if nursing home is needed. wife who was deeded 2 income properties in 1989, with affidevit stating that grantor , husband was retaining no reserved interest in property and it was filed.property not in trust but owned solely and willed to children with herand only her life interest till death.wife died 2008 leaving said property to her 3 children by will drawn before she died. upon her death and as sole beneficiaries to her solely owned properties since 1989, children sold property when her estate was settled in 2009. husband now entered nursing home sept. 2010. medicaid is saying that these properties are part of the madiaid consideration of assets. this cannot be? thank you
- Category: Wills and Estates
- Date:
- State: New York
Answer:
When one spouse applies for Medicaid, both spouses' assets are considered, regardless of how they are held. This means that even if one spouse has separate assets, they are treated as a single financial unit. Medicaid has a five-year look-back period to check for asset transfers made for less than fair market value. If assets were transferred within this period, it could lead to a penalty period where Medicaid benefits are denied based on the amount transferred.
Under the Uniform Fraudulent Transfer Act, if a transfer is made with the intent to defraud creditors or without receiving equivalent value, it can be challenged. For Medicaid eligibility, if assets were disposed of for less than fair market value, this is considered a "disposal of resources," which can affect eligibility for long-term care assistance.
As of February 8, 2006, the look-back period for asset transfers was extended to five years. For every $4,300 transferred, there is a one-month disqualification from Medicaid coverage for nursing home care. The penalty period starts either on the first day of the month after the transfer or when the individual is eligible for Medicaid, whichever is later.
In your situation, if the properties were sold after the wife's death and the husband applied for Medicaid within five years of that sale, Medicaid may consider those assets in determining eligibility.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.