Very few people are eager to go into a nursing home or assisted living. Yet, as we age, that level of care becomes a necessity for many people. If physical infirmity doesn't keep us from caring for ourselves, memory issues, such as Alzheimer's, may cause us to need long-term care. According to the United States Department of Health and Human Services (HHS), over 40 percent of people will need care in a nursing home at some point, either on a temporary or permanent basis.
As of 2015, the most recent year for which figures are currently available, the median cost of a private nursing home room in the Dayton, Ohio area exceeded $100,000 annually. This figure is unlikely to decrease in the future.
Given the likelihood of needing care and the expense of skilled nursing care, there is an overwhelming expense looming for many families. Some people who can afford it and qualify for it purchase long-term care insurance. Many people also consult an elder law or estate planning attorney about Medicaid planning, with an eye to reducing countable assets so that they can qualify, sooner, to have Medicaid cover the cost of a nursing home stay.
What many people do not consi… Read More
You are probably aware of how expensive nursing home costs are in this country, and that they will likely only continue to increase. You may also know that in order to meet those rising costs, more and more nursing home residents need Medicaid to help pay for care.
Unless you've had a family member pass away after receiving Medicaid benefits to help pay for their nursing home care, you may be less aware of the Medicaid estate recovery program. Essentially, this program, instituted in Ohio a few decades ago, allows the state to recoup funds it paid out in Medicaid benefits from the estate of a deceased recipient. Even more recently, the state expanded the notion of what assets qualified as recoverable under the Medicaid estate recovery program. Whereas the Medicaid estate recovery originally could recover only probate assets, the state later implemented an "augmented estate" approach that allowed the Medicaid estate recovery program to claim against assets in which the Medicaid recipient had a legal interest in the moment before his or her death. These include living trusts, jointly held bank accounts, and jointly held real estate.
The expanded reach of the Medicaid… Read More
You may be familiar with Medicaid as a government program that provides funding for health care to people with limited income. You may also believe that, as someone who has worked and saved for all of your adult life, you will never fall into the category of individuals who need Medicaid assistance. Hopefully, you are right about that.
You might be surprised to learn that many people in a similar situation to yours have ended up needing Medicaid services for one reason: they have needed nursing home care for an extended period. Nursing home care is expensive—in some cases up to $100,000 per year or more—and it is not covered by Medicare except in certain limited instances. That means that when an individual's funds are depleted and they can no longer pay out-of-pocket for care, they may become eligible for Medicaid.
After a person who has received Medicaid dies, the State of Ohio has the right to file a claim against their estate to recover some or all of the assets paid out through Medicaid on their behalf. This is called "Medicaid estate recovery." All states that receive federal Medicaid funding are required by law to establish such an estate recovery progra… Read More
If you're at the stage of your life where you have spent decades working hard to build a solid financial future for your family, and are now in a position to make the lives of your adult children more financially comfortable, you may be wondering about the best way to go about that—for them and for you. Perhaps you're also wondering if a time is coming when you will need long-term care outside of your home. You don't want your assets to go to the nursing home; you want them to go to your family. Should you just go ahead and transfer assets to your children now? You could, but doing so is not without risk. Let's talk about some of the pitfalls of transferring assets to adult children.
Pitfall #1: Loss of Control
You would do anything for your children, and you believe they would do the same for you. So it doesn't occur to you to hesitate to transfer assets, even the deed to your house, to them. You have an understanding, implicit or explicit, that if you have a need, they will take care of you or even transfer the asset back to you. You might even have a "wink and a nod" agreement with them: the asset is theirs in name only, but really, you both intend that it i… Read More
Federal Medicaid law compels states to seek, when possible, reimbursement from individuals for Medicaid payments made on their behalf. There are a couple of mechanisms by which this happens. One of these is known as Medicaid estate recovery. When the law was written, the word "estate" was interpreted as the Medicaid recipient's probate estate. Your probate estate, of course, may exclude a lot of assets, including those held in trust, property subject to a life estate, and property held jointly with other people. As of 1993, states were given the choice to broaden the definition of estate to include these types of nonprobate assets to the extent of the Medicaid recipient's legal interest in the assets at the moment before their death.
In 2005, Ohio joined the ranks of several other states in adopting an expanded definition of what "estate" means within the context of Medicaid estate recovery. Unfortunately for Ohioans, that definition was as expansive as federal law allowed.
The resulting change meant that any of the deceased Medicaid recipient's probate assets were subject to recovery, along with nonprobate assets such as insurance benefits, trust assets, and payab… Read More
If you have a loved one in a nursing home, there's a fairly good chance that they will receive Medicaid benefits at some point to help pay for their care. You probably know that Medicaid is also entitled to recover assets from your loved one's estate. The estate, for purposes of Medicaid estate recovery, includes all assets that a Medicaid recipient owned at death, regardless of whether it passed through probate. (This includes assets conveyed to a survivor, heir, or assign through joint tenancy, tenancy in common, survivorship, life estate, living trust, or other arrangement.)
What are the mechanics of the recovery process? How long does the state Department of Medicaid have to act in order to recover assets from an estate? Can Medicaid recover assets from an estate after it has gone through the probate process and assets have been distributed to the heirs or beneficiaries of the deceased?