Cona Elder Law


Medicaid and Real Property: Avoid Costly Mistakes


When engaging in Medicaid planning and applying for Medicaid benefits, the old saying is true: you get what you pay for.  Although it may be tempting to utilize the lower-cost services of a Medicaid agency instead of an Elder Law attorney, without proper legal guidance, it can cost you and your family tens or even hundreds of thousands of dollars.

Consider this example: 

John and Diane lived with John’s mother in her home for the past seven years.  When John’s mother needed care in a nursing home, John hired a non-attorney Medicaid agency to handle the application.  As part of that process, John transferred the deed to his mother’s home to himself and his wife, Diane.  Seems reasonable since both John and Diane are living in the house, right?  Wrong.  When the Medicaid application was processed, a 40 month penalty period was assessed based on the transfer of the house.

John was entitled to the “caretaker child” exemption, meaning that the house could have been transferred to him with no Medicaid penalty period since he lived with his mother for at least 2 years before she went into the nursing home.  However, John transferred title to himself and his wife.  The “caretaker child” exemption extends only to natural children.  In addition, John and Diane had taken a mortgage for half of the value of the property.  As such, one-half of the value of the property was transferred for consideration.  As it stood, however, John and Diane would need to pay the nursing home approximately $480,000 ($12,000/month) due to the 40 month penalty period.  Had John and Diane retained an Elder Law attorney, this costly mistake would not have happened.

While some of these mistakes can be successfully appealed, it comes at great cost to the client – both financially and emotionally.  Had these clients retained an Elder Law attorney from the beginning, this costly outcomes could have been avoided.

Elder Law practitioners come up against many issues that are specific to our area of practice, such as Promissory Note planning to protect assets upon or even after nursing home admission, Undue Hardship applications to reverse a penalty period that resulted from action taken by someone other than the applicant, applications and hearings to prove that an asset transfer was a gift made for a purpose other than to qualify for Medicaid benefits and more.  Elder Law attorneys can provide the legal advice necessary to handle all such cases properly from the beginning, saving the client time, money and much unnecessary angst.

About the Author Cona Elder Law

Cona Elder Law is a full service law firm based in Melville, LI. Our firm concentrates in the areas of elder law, estate planning, estate administration and litigation, special needs planning and health care facility representation. We are proud to have been recognized for our innovative strategies, creative techniques and unparalleled negotiating skills unendingly driven toward our paramount objective - satisfying the needs of our clients.

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