By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Medicaid Attorney
One of the biggest impediments towards getting Medicaid to pay for the nursing home care of a loved one is gifting money to family members that could have otherwise been used to pay the nursing home. Your County Board of Social Services will not allow you to receive Medicaid for a period of time if you simply give away your property for nothing in return. If your loved one is in a nursing home or assisted living residence, the nursing home is still looking for their money to pay for your loved one’s cost of care. So what happens when you transfer your assets, but do not have enough money left to pay the nursing home? Can the nursing home have those transfers voided? A published legal decision from a sister state suggests that these transfers can be voided.
The applicant in the case I am referring to sold his house to his daughter for its fair market value but then made gifts of the sale proceeds to that daughter and two other daughters. Medicaid recognized these payments as impermissible transfers and instituted a 16-month ineligibility period. The applicant and daughter paid for 13 of the 16 months at the nursing home, and the nursing home obtained for a judgment of the remainder. Because the father did not have enough money to pay the nursing home, the nursing home sued the daughters who received the gifts.
The court found that the applicant was solvent at the time he applied for Medicaid benefits, but the transfers rendered him insolvent “and that the only apparent purpose for the transfers was to protect [the petitioner’s] assets so Medicaid would remain responsible to pay for his care.” It therefore held the gifts to the children fraudulent and ordered the three daughters to pay the facility in proportion to the amount they received from the applicant.
The morale to this story is that you must make sure you have a plan for paying the nursing home during any penalty period. Whether you use the family’s assets, the applicant’s assets, or a combination of both, you will need a plan to get through the period without being subject to litigation to return the transferred assets by the long term care provider.
To discuss your NJ Medicaid matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at email@example.com. Please ask us about our video conferencing consultations if you are unable to come to our office.