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Your Generosity May Punish You- Part 2

giftContinuing in the spirit of the holidays, as a reminder, gifts made by a Medicaid applicant within the previous five years will punish the applicant. Transfers of assets for less than fair market value made by the person or his or her spouse within “look-back period” will render the person ineligible for nursing facility services.

EXAMPLE: Harriet and Harold of Hauppauge, NY married fifteen years ago. It was a second marriage for both of them. Harriet has two daughters from her prior marriage and they both live in Suffolk County. Harold has three sons from his prior marriage and they all live in neighboring Nassau County. Two years ago (2013), Harriet’s health started to decline. During these two years she had two stays in the rehabilitation center in St. James because her balance was unsteady and she needed help to walk even short distances. During his wife’s second stay at the rehabilitation center (one year ago in 2014), Harold decided to make gifts of his “separate” money to his three boys. He gave them each $5,000.00 in June of last year. Six months later he gave his three sons, Christmas gifts of $5,000.00 each.

Harriet recently suffered a stroke and became a permanent nursing home resident in February 2015. Harriet’s assets, which totaled $100,000.00, were transferred to Harold so that assets in her name were below $14,850.00 (the resource allowance in 2015). An application was made to the Suffolk County Department of Social Services (“DSS”) and Harriet was denied because she made transfers of assets for less than fair market value. DSS determined that Harriet is not eligible for nursing facility services for a period of 2.4 months.

How was this determination made? The transfers Harriet made to Harold are NOT punished, however, the transfers by Harold to his three sons, do punish Harriet. In determining the Medicaid eligibility of a person receiving nursing facility services, any transfer of assets for less than fair market value made by the person or his or her spouse within or after the “look-back period” will render the person ineligible for nursing facility services. Section 366 of New York’s Social Security Law states that an individual will not be ineligible for Medicaid if the transfer of assets are transferred to the individual’s spouse. Hence the $100,000.00 gift from Harriet to Harold does not punish Harriet. However, because Harold made gifts to his three sons, within the “look-back period,” Harriet gets punished for the gifts of her husband. Specifically, the gifts total $30,000.00. This figure divided by the regional rate in Suffolk County for 2015 ($12,390.00) results in the quotient of 2.4 – the number of months Harriet must privately pay the nursing home. i

To be continued ….

Aaron E. Futterman, CPA, Esq. is a partner in the law firm of Futterman & Lanza, LLP with offices in Smithtown, NY and clients throughout Suffolk, Nassau, Queens, Brooklyn, Bronx, Richmond, New York, Westchester and Rockland Counties. He concentrates his practice to Elder Law, Medicaid Planning, Medicaid Applications, Estate Planning, Probate, Estate Taxes, and Estate Administration.

i See Albany Fair Hearing dated June 22, 2015, FH # 7059171Q

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