To receive Medicaid assistance for long term care, a senior must show financial need. In some cases, significant financial decisions are made with the intent to qualify for Medicaid. Unfortunately, due to misinformation or misunderstanding, those decisions can have the opposite effect. I previously gave the example of a couple who thought they had to get a divorce in case one of them needed to qualify for Medicaid. As I hope you will come to see, this would have been exactly the wrong thing to do.
Let me give another example. Much of this example is true, but some facts have been changed to protect the identities of those involved and to help make my point. There was a man who had a sizable amount of equity in his home. I believe the home was worth approximately three hundred thousand dollars.
He was diagnosed with early onset dementia. He told me that, at the behest of a professional advisor, he deeded his interest in the home to his sister. His purpose was simple. If he needed long term care, he wanted Medicaid to pay for it. Therefore, he wanted to get assets out of his name so that he would fall below what he was told would be the asset limit.
Things did not turn out as planned. Within a few weeks, his sister had him declared mentally incompetent, a claim he emphatically denied. This development not only left him without any control over his most substantial asset; he also lost the ability to pass on that asset to his children.
Further, gifting that asset to his sister actually jeopardized his ability to receive Medicaid assistance. Had he retained his ownership in the home, he would have retained control over what would happen to that home. He also may well have qualified to receive Medicaid assistance, if needed, despite the significant value of the home. In upcoming articles, I will explain why.
© 2015 Steven J Wright