Act Two - YOUR GUIDE TO RETIREMENT PLANNING AND LIVING
By Jennifer B. Cona, Esq.
The Problem: My widowed father is 93 and needs full-time care. He lives in a senior co-op for which he is still paying a mortgage. He has a small bank account but no other assets. The co-op rules do not permit the transfer of the co-op to another party. His Social Security and pension benefits total $20,000 annually. How can he afford care?
The Expert: Jennifer B. Cona, elder law attorney, Cona Elder Law, Melville.
The Rules: The co-op is an exempt asset for Medicaid purposes, as long as your father is living there or intends to return home from a nursing home stay. Medicaid will have the right to be paid back out of the proceeds when the co-op is sold.
The Strategy: Your father can apply for Medicaid benefits. He should qualify for either at-home or institutional nursing home benefits.
How it Works: If your father’s bank account totals less than $4,350 in 2008, he can qualify for Medicaid benefits right away. While he remains at home, he can keep $725 in monthly income, which is the 2008 state income allowance. If your father needs more than $725 a month to pay his co-op mortgage, he can participate in a Pooled Income-Only Trust to avoid having to spend down all of his income in excess of the $725 a month on the costs of his medical care. Pooled Income-Only Trusts are a type of supplemental needs trust that are established and managed by not-for-profit organizations. Once placed in the trust, your father’s excess income can be used for his living expenses, including his mortgage payments, food, utilities, recreational activities and clothing.
The Result: Your father’s ownership of the co-op will not impede his Medicaid eligibility, and Medicaid cannot force the co-op to be sold during his lifetime. But Medicaid will have to be reimbursed from your father’s estate for money the program expended on his behalf before any of your father’s beneficiaries can inherit from him.