When Is Three Years Not Three Years?


Here are several scenarios. The question is: “When, if ever, does Mom become eligible for Medicaid benefits?” As in law school exams, ignorantia legis non excusat.*

Mom gave $80,000 to her daughter twelve months ago. Mom gives all of her money ($40,000) to daughter today. Mom enters a nursing home tomorrow and applies for Medicaid. In January, 1999, Mom gave daughter $100,000. Mom enters a nursing home tomorrow and applies for Medicaid. In March of 1998, Mom put daughter’s name on her $125,000 house. Mom enters a nursing home tomorrow and applies for Medicaid.

The analysis begins as of the earliest day on which Mom is both in the nursing home and has applied for Medicaid. This is known as the “snapshot” or “trigger” date. Medicaid looks at her assets as of this date. If she is married, then the rules for a division of assets under the Spousal Impoverishment Provisions apply.

If she is single, then she will have to simply spend her assets down to $2,000 if she is a South Carolina resident.

You may recall from our earlier newsletters that certain assets are exempt. They include the following:

Residence
Vehicle
Personal Property
$1,500 Cash Value Life Insurance
Irrevocable Pre-paid Funeral Plan


The other assets count. The “trigger” or “snapshot” date opens a window backwards of 36 months through which DSS in South Carolina may identify gifts. (The window for transfers to trusts is 60 months.) The Medicaid agency then combines all the fits that fall within the window and divides the total by the state-mandated average cost per month for nursing home care. In South Carolina, this is currently $3,497 per month. The result is the number of months the giver is ineligible for Medicaid benefits. The ineligibility begins on the first day of the months in which the gift was given. The rest is arithmetic.

ANSWERS:

Not yet. Mom has not applied.
In South Carolina, not for 20 months, i.e. $40,000 divided by $3,497 per month penalty equals 20 months. Typically the $3,497 number is changed each year.
Immediately. The gift is not in the three year look back window.
This is a gift of $62,500, resulting in a penalty in South Carolina of 18 months.

* Ignorance of the law is no excuse.

Elder Law Today is written by Jackson E. Fields, Jr., Attorney at Law. This newsletter is published as a service of the Fields Law Firm, P.A. This information is for general informational purposes only and does not constitute legal advice. For specific questions, you should consult a qualified elder law attorney. www.thefieldslawfirm.com