Reverse Mortgages–Part 2

How much can I borrow?

What can be borrowed is not a set amount, it is a formula that takes the following into consideration.

1. The age of the borrower.

The older the borrower, the more that can be borrowed.

2. Current Interest Rates

The lower the interest rate, the more that can be borrowed.

3. The equity in the home.

The greater the value of the home, the more that can be borrowed.

4. The location (county) of the home

AARP has a very effective calculator that can help you determine how much money you might be able to take out of your home.

http://rmc.ibisreverse.com/rmc_pages/rmc_aarp/aarp_index.aspx

How is the Reverse Mortgage paid off?

Typically, the reverse mortgage is paid off by the borrower's estate.

The reverse mortgage can also be paid off from the proceeds of the sale of the house if the house is sold before the borrower is deceased.

What if I owe money on my home?

If you do not own your home outright (if there is an existing mortgage) you must pay off that mortgage, however, it can be paid off with the proceeds of the Reverse Mortgage.

 

to be continued…

Reverse Mortgages–Part 1

Introduction to Reverse Mortgages from an eldercare perspective.

Elders often struggle to find the resources to stay out of nursing homes, and stay in their home, but still need in-home care. A reverse mortgage can be used to help make that happen.

Medicaid can be used to pay for nursing home care, but stay at home care can be difficult under Medicaid.

A reverse mortgage is not a panacea and should be evaluated with the help of an elder care attorney or elder care financial advisor.

What is a reverse mortgage?

A reverse mortgage is a loan designed specifically for elders (62 years of age or older) to take money out of their home either in payments, in a lump sum, as a credit line, or as any combination of the three.

Repayment of a Reverse Mortgage

A Reverse mortgage is a LOAN, and that loan has to be repaid.

The loans do not have to be repaid until any of the following 3 events occur.

1. the last surviving borrower dies.

2. the home is sold.

3. the borrower moves out permanently.

What is the purpose of the Reverse Mortgage?

One must never forget that the first purpose of any financial instrument, is to make money for the lender.

The intention or motivation for a reverse mortgage was to give seniors that were real estate rich, but cash flow disadvantaged, fast and easy access to the equity in their home for any purpose, including home based elder care.

 

to be continued….

Elder Abuse, a growing crisis without leadership -Part 2 of 3

Elder abuse case loads are growing in both number, and complexity.  According the study, APS  (Adult Protective Services) program resources are not keeping pace with these changes.  It is difficult to keep pace with enough caseworkers, and keep APS caseworkers appropriately trained, to help our growing elder community.

The study indicates that a lack of coordination in collecting, maintaining and reporting statewide case level administrative information, which limits government’s ability to track the effectiveness of services that they have provided.

The Older Americans Act of 1965 spoke to the importance of needed federal leadership in the elder justice area, the study states that no national policy priorities currently exist… almost 50 years later!

 

Seven agencies within the Departments of Health and Human Services, as well as the Justice Department authorized 11.9 million dollars in grants in 2009 for support for the justice department to support sharing of information between Adult Protective Services and its many partners, like law enforcement.  However, the result has not offered Adult Protective Services the support they need to resolve elder abuse cases, or in standardizing the information that they need to effectively report on the problems that they have encountered. 

 

Part 3 next week…

 

Cohen & Oalican acts aggressively against nursing home abuse and neglect. We proudly provide legal services to the elderly and persons with disabilities and their families. If you have an elderly parent or relative in a nursing home, and you suspect they are being abused or neglected, get help right away. Our nursing home abuse lawyers will advise you on nursing home abuse laws and the rights of residents under the care of nursing home staff.  Contactone of our nursing home attorneys to schedule a consultation. A specialist in nursing home neglect will investigate the abuse or neglect and help you decide what may be your best legal options.

Elder Abuse - a growing crisis without leadership Part 1 of 3

According to the March 2011 Government Accountability Office (GAO) report “Leadership could Enhance National Response to Elder Abuse”  over 14%  (14.1%) of elders (not institutionalized) have experienced elder abuse.

Below is a link to the study.

http://www.gao.gov/products/GAO-11-208

Elder Abuse is categorized as

·         Psychological

·         Physical

·         Sexual Abuse

·         Neglect

·         Financial Exploitation.

 

The study, and three similar studies preceding it, indicates that the numbers are likely higher due to non-reporting among seniors.

The factors that leave elder adults prey to abuse include:

·         Physical and Cognitive       Impairments

·         Mental Problems

·         Low social support among victims.

 

This abuse has been associated with a negative impact on health and longevity.  In short, we have a growing problem of elder abuse, that’s literally killing our elderly population.

 

Part 2 to be posted next week…

Cohen & Oalican acts aggressively against nursing home abuse and neglect. We proudly provide legal services to the elderly and persons with disabilities and their families. If you have an elderly parent or relative in a nursing home, and you suspect they are being abused or neglected, get help right away. Our nursing home abuse lawyers will advise you on nursing home abuse laws and the rights of residents under the care of nursing home staff.  Contact one of our nursing home attorneys to schedule a consultation. A specialist in nursing home neglect will investigate the abuse or neglect and help you decide what may be your best legal options.

Top 10 Most Important Cuts to MassHealth for Seniors, the Disabled, and their Families

 

continued from March 14th….

 

 

6. Elder Home Care

Approximately 2,500 frail elders each month are able to receive community based care services allowing them to stay in their homes and out of hospitals or other care facilities. There are now more than 2,700 elderly each month on waiting lists for these services. This program has experienced a $21.7 Million cut.

7. Elder Protective Services Cut

It’s no secret that the elderly are frequently preyed upon by the unscrupulous, and often loose whatever nest eggs they have managed to save and protect. The program that focuses on protecting the elderly has experienced a $1.5 Million (or 9% when adjusted for inflation) cut. More cases of elder abuse are likely to go uninvestigated. Fewer Guardians may be granted to Massachusetts most vulnerable elders.

8. Council on the Aging

The Council on the Aging sponsors locally focused programs that provide a variety of recreational and support service to elders. Adjusted for inflation this has been cut 11% since 2009. This year, it experience an almost Million Dollar cut in funding.

9. Geriatric Mental Heal & family Caregivers programs eliminated

This is a quarter of a million dollar program that has been entirely eliminated in the 2011 budget.

10. Home Care of the multi-Disabled

28% of the budget since 2009 for this program has been cut (adjusted for inflation). This program provides funding for home care of the multi-disabled, enabling a higher quality of life for those with multiple disabilities, who would otherwise be forced into institutional care.

 

If you have any concerns about how these cuts will affect you, contact our Elderlaw Attorneys at http://www.cohenoalican.com

Alternatives to Nursing Homes as Nursing Home Populations Swell With Younger Patients – Conclusion

Our current health care reform has several provisions to incentivize states to expand at home care, but there is still a strong “institutional bias” that requires states to fund nursing homes, but makes the payment of nurses for at home care optional.   Despite the savings, participation in  a new Federal pilot program that promotes at home health care is optional for states.

Another trend that has been found is that the population in nursing homes is changing to those who are either sicker, or more economically disadvantaged.   Those with the ability to pay, are moving to assisted living facilities.  Those who do not have as great a medical need (i.e. Healthier, but still in need of assistance) are also better served in more independent living facilities.  This new movement creates a nursing home population that is more disadvantaged both from a medical and a financial perspective.

NPR reports that “By federal law, people who face going into a nursing home must be told about alternatives. But in Miller's study in one state, nearly 30 percent of younger people in nursing homes said they weren't told about options. Often doctors and other health care providers just don't know what's available — and recommend a nursing home instead.”

Many times, when younger people chose to not to into a nursing home, it is at the expense of family members.  These family members provide care at no cost to the state.  While the state gets a free pass, the care giver family members can bear a huge burden in terms of  health, time and stress.

There are alternatives for many younger people to nursing home care.  With an experienced legal advocate by your side, you can also consider independent living facilities.  Many severely disabled people still live full and rich lives, not even in a facility, but with at home care.  It will frequently take an experienced attorney to protect your rights, and to help you determine what care is most appropriate for your situation.

 

We welcome hearing from you if you or a family member has special needs, and is looking for alternatives to nursing homes, or looking for ways to protect your family financially from the costs of long term care.

Call one of elder law attorneys at Cohen & Oalican, LLP Boston, Andover and Raynham.

Alternatives to Nursing Homes as Nursing Home Populations Swell With Younger Patients - Part 1

We heard the other day on National Public Radio, that one of the fastest growing populations in Nursing Homes is not the elderly, but rather adults   aged 31 TO 64.

These patients that are victims of disease, accident, health failure, or mental health problems.  Many of these new patients could be cared for at home, or assisted living facilities, but are instead finding themselves in the Nursing Home System.  Young people aged 31 to 64 are the single fastest growing population of nursing homes.  This population has grown roughly 40% since 2000.

This report underscores the fundamental need for legal advocacy when considering nursing home care, or alternatives to nursing home care.

You can see the full report here.

http://www.npr.org/2010/12/09/131912529/a-new-nursing-home-population-the-young

 

All too often, people think of nursing homes as a repository for the elderly, and disability attorneys like Cohen and Oalican as being entirely elder law.  There is a huge sense of accomplishment for us, however, when  we can use our skills and help young people, and their families, to live a fulfilling life, perhaps outside of institutional care, and despite their disadvantages.  We have long been involved in special needs trusts to help protect family’s finances when there is a young (or younger) family member with special needs.

 

To be continued….

Preview of the Proposed New Tax Relief Act of 2010–Conclusion

 

 

Changes to Regulated Investment company (RIC). 
Do you have investments in an offshore owed Regulated Investment company (RIC).  Here’s what changes you might be able to expect if the current bill is extended.

 

Estate tax look-through of certain Regulated Investment Company (RIC) stock held by nonresidents. Although stock issued by a domestic corporation generally is treated as property within the United States, stock of a RIC that was owned by a nonresident non-citizen is not deemed property within the United States in the proportion that, at the end of the quarter of the RIC’s taxable year immediately before a decedent’s date of death, the assets held by the RIC are debt obligations, deposits, or other property that would be treated as situated outside the United States if held directly by the estate (the “estate tax look-through rule for RIC stock”). The proposal permits the look-through rule for RIC stock to apply to estates of decedents dying before January 1, 2012.

 

By the time you read this, much may have been changed.  What we know for sure is that there will be change and it will impact our elder and special needs clients.  Please consult with us, or with an appropriate elder law attorney as you make decisions that will impact your taxable situation for the coming years.

 

Your friends at…

 

Cohen & Oalican

Boston Elder Law Attorneys
Raynham Elder Law Attorneys
Andover Elder Law Attorneys

Preview of the Proposed New Tax Relief Act of 2010 - Part 4

 

Once again.. this is a preview of what is currently under discussion.  It is NOT law, and should not be looked at as political, legal, or financial advice.  This is only  a brief look at some of the currently debated act, as it impacts our senior clientele.

 

Tax Free Distributions to Charity from IRA Account
Continuing on the theme of philanthropy, if approved, there will continue to be opportunity to make charitable contributions from your retirement account without attracting a tax penalty.

The bill if approved in its current form extends through 2011 the provision that permits tax-free distributions to charity from an Individual Retirement Account (IRA) of up to $100,000 per taxpayer, per taxable year. The bill allows individuals to make charitable transfers during January of 2011 and treat them as if made during 2010.

 

To Be Continued…

 

Your friends at…

 

Cohen & Oalican, LLP

Boston Elder Law Attorneys
Raynham Elder Law Attorneys
Andover Elder Law Attorneys

Preview of the Proposed New Tax Relief Act of 2010 - Part 2

 

Once again.. this is a preview of what is currently under discussion.  It is NOT law, and should not be looked at as political, legal, or financial advice.  This is only  a brief look at some of the currently debated act, as it impacts our senior clientele.

 

 

Capital Gains and Dividends.
Many of our clients are reliant on their investments.  Here is what is under contemplation regarding Capital Gains and Dividends.

Under discussion it to temporarily extend the current capital gains and dividend rates. Currently  capital gains and dividend rates for individuals below the 25% bracket is equal to zero percent. For those in the 25% bracket and above, the capital gains and dividend rates are 15%. If this portion of the act does not happen, capital gains taxes become 10% and 20% respectively.  Dividends will be subject to the ordinary income rates. This proposal extends the current capital gains and dividends rates for all taxpayers for an additional two years, through 2012.

 

 

Dependent Care Credit
Many of our clients have adult dependent children, or are themselves dependents of their children.  The impact of the dependent care credit is of a direct concern to our elder and disabled clients.   Under discussion is to (temporarily) extend the expanded dependent care credit.  The dependent care credit allows a taxpayer a credit for an applicable percentage of child care expenses for children under 13 and disabled dependents.   The current eligible expenses are $3,000 for one dependent, and $6,000 for two or more dependents.  These are proposed to be extended through 2012.   If the credit falls back to previous rates, it will be only $2,400 for one dependent and $4,800 for two or more dependents.

 

 

Your friends at…

Cohen & Oalican, LLP

Boston ElderLaw Attorneys
Raynham ElderLaw Attorneys
Andover ElderLaw Attorneys

Preview of the Proposed New Tax Relief Act of 2010 - Part 1

 

 

There’s a lot of talk about the New Tax Relief Act of 2010. 

At the time of this writing, it isn’t law, and with our current political logjam, there is likely to be a fair bit of change between now and then. 

We thought, however, that our clients would like to hear some of the elements that are of most direct interest to their welfare, and to the health of their estate.

Once again.. this is a preview of what is currently under discussion.  It is NOT law, and should not be looked at as political, legal, or financial advice.  This is only  a brief look at some of the currently debated act, as it impacts our senior clientele.

Reductions in Individual Income Tax Rates

Under contemplation is to temporarily extend the 10% bracket. The 10% individual income tax bracket expires at the end of 2010, and this impacts a great deal of our elder law clients. If nothing happens, the lowest tax rate will be 15%. This proposal extends the 10% individual income tax bracket for an additional two years, through 2012.

 

Part 2 will look at the proposed changes to Capital Gains and Dividends as well as The Dependant Care Credit.

 

Your friends at…

Cohen & Oalican, LLP

Boston ElderLaw Attorneys
Raynham ElderLaw Attorneys
Andover ElderLaw Attorneys

Scams and our elderly clients

• Unlicensed contractors offering home repairs: "Hey, we just finished a job for the smiths two streets over, and there's leftover tile, would you like a great deal on....."  If it sounds too good to be true, it probably is.  Beware of home repair scams.   Look out for transient work crews, strangers claiming to have extra material, free inspections in your home.. All of these should be red flags.  You should look to licensed bonded and insured professionals.  It may feel more expensive at the outset than these street contractors that show up.. but nothing is more expensive than a botched job, or worse, paying and never seeing your money or the work again.  Shop around for a certified contractor insist on a detailed contract on the work to be done, estimated cost and timetable.

• The state of Massachusetts Executive Office of Elder Affairs should be notified of any scam, or scam attempt by calling 1-800-243-4636.

If you have been victimized, keeping quiet will not help the next victim in line.  Just last month (October 20/2010) in Ipswitch an elderly citizen was approached by someone saying that they were the recipient of funds from the federal government, and asked to provide personal information in order to claim his windfall.  The man intelligently informed local police, and the scammer was investigated and arrested.  We applaud this anonymous individual.  Our elders cannot be a doormat waiting for the next scam artist to come knocking. 

If you are subjected to a scam, contact local authorities, and your elder law attorney.

 

At Cohen & Olican we take pride in protecting our clients.

Scams and our elderly clients–Fake Charities

Fake Charities:  

Scam artists create fake charities, often sounding like a real charity... they can spend a few dollars at a local copy store to dummy up credible looking ID, and they go on the prowl.  These ruthless con men (and women) not only steal from the vulnerable, but they also make it harder and harder for legitimate charities to do the worthy work that they are chartered to do.  We recommend that you make a conscious decision and a real plan for your charitable giving and philanthropy.  Check out the organizations that you intend to support, and support them for the good works that they do.  Do not be moved by the compelling story of a young woman knocking on your doorstep.  Legitimate charities are registered with the state of Massachusetts.  Here's a website to go to to validate whether or not a charity is registered with the state. 

At Cohen and Olican we take pride in protecting our clients.

Scams and our elderly clients: Some common swindles–ID Theft

 

 

ID theft: With the growing of the internet and all the different ways con artists work to get ahold of your private information, you must be incredibly careful with Identity theft.   Place outgoing mail in a secure collection box and remove incoming mail from your mailbox promptly. Get a shredder.. nothing that is in your trash should be considered safe.  Any personal information should be shredded before it is trashed.   Question any website that asks you for your passwords or bank account numbers.  Websites can be built to look like they are your real bank website - but in truth - they are there to take your information.  If it doesn't feel right..ask the question.. has my bank ever before asked me to go to a website just to confirm my password... We assure you - they haven't.  If in doubt.. call your bank, or whomever it is that is asking for your information.   To cut down on credit offers, call 888-567-8688 or go to http://www.optoutprescreen.com to opt out of mail credit offers. You will need to provide your Social Security number so they can match your request with your file - this is a legitimate request for your private information.

 

At Cohen Olican we take pride in protecting our clients. 

Scams and our elderly clients.

Our elder law firm, Cohen & Olican LLP, works hard to protect the rights and assets of our elderly and handicapped clients.  When we champion your rights, it is totally upsetting to us to see our clients preyed on by unscrupulous con artists. 

So, in this article, we are going to do our best to alert you to some of the more common scams, and how to protect yourself.  Of course, should you fall victim to one of these scam artist, turning to professional law enforcement, and your elder law attorney is far more important than protecting yourself from embarrassment.  Acting against these scam artists is the only way to protect the next victim.

You've hear the adage "If it sounds to good to be true......"   Well, frankly, more often than not, it is too good to be true.   Yet still the vulnerable are constantly preyed on by con men and women, leaving financial devastation in their wake.

 

Tomorrow we will present some of the most common scams you should be on the look out for.

Sharing of Data Leads to Progress on Alzheimer’s Disease - Part 1

A project was initiated in the year 2003 when the National Institutes of Health, the Food and Drug Administration, the drug and medical-imaging industries, universities and nonprofit groups joined hands in a joint endeavor to find the biomarkers that reveal the progress and evolution of Alzheimer’s disease in the human brain. It was a unique project in the annals of medical research and it is yielding results now, which are evident in a deluge of research papers on the subject.

Early diagnosis of Alzheimer’s is being done with PET scans and spinal fluid analysis and more than 100 drug studies are in progress to find formulations that might slow down or even cure the disease. This remarkable collaborative effort is showing the way for more such projects and a similar one has begun for Parkinson’s disease. The Michael J. Fox Foundation has sponsored a $40 million study to find the biological markers for Parkinson’s disease that will enlist 600 subjects in Europe and the USA.

The project has generated great excitement among the research fraternity as the agreement to share all data and make all findings public was something unheard of in the scientific world. Anybody with a computer anywhere can access all the data and go through the findings of all the research studies on the subject. The objective was not just to raise funds, or do research but share all the facts and figures and everything going on in the project on a global scale. There would be no ownership or patent of the data or the research finding and everything would be in the public domain. Private pharmaceutical companies would of course benefit in the long run from the drug formulations or imaging tests that were being developed during the project.

Dr. John Q. Trojanowski, an Alzheimer’s researcher at the University of Pennsylvania is stunned by the amazing scope of the project. It is a project that is unique and path-breaking in scientific research, according to him. But it is the only way to do it, as unless we kept aside our egos and intellectual property issues, the task of finding the biomarkers for these diseases would be an impossible one, he says. It does not mean that a person having the biomarkers would definitely get the disease, but that is also part of the project. The study aims to find those biomarkers that herald the onset of the degenerative disease.

The Alzheimer ’s disease Neuro-imaging Initiative or ADNI came about during a normal conversation about 10 years ago. Neil S. Buckholtz, chief of the Dementias of Aging Branch at the National Institute on Aging was being driven to the airport in Indianapolis by Dr. William Potter who was himself a neuroscientist at Eli Lilly. Dr. Potter was seriously thinking about the ways to hasten the progress of the drug research on Alzheimer’s. He wanted to come out of the typical drug development syndrome of the 19^th century, where a drug was administered and then everyone waited around for it to work. He felt that there must be some other method, where one could view the brain as Alzheimer’s developed and then formulate drugs to halt that development. There were efforts to locate biomarkers, but there was not much progress as different scientists in many different parts of the world were doing their own studies in their universities and with their own patients. They were obviously coming up with different results due to this.

Could someone you love have Alzheimer’s? Do you have a long term plan to deal with the Medicaid issues surrounding this? Call Cohen & Oalican, LLP to draw up a plan.

MEDCottage or Granny Pod–Part 1

 

MEDCottage

One of the things that the elderly hate the most and find really upsetting is to be moved from their familiar surroundings to a hospital or nursing home. The clinical, coldblooded ambience of a medical treatment center possibly makes the older lot a bit nervous and also tentative about their future.

Priests attending to older people have commented on this feeling and also opined that it appears that closeness to family members and access to their loved ones are most important issues. There was one lady in particular about whom Rev. Kenneth Dupin had talked about when discussing this aspect of caring for senior citizens. Katie was a happy old lady living in her own home, filled with mementos and artifacts from her past and she loved to talk of the days gone by. Rev. Dupin enjoyed listening to her anecdotes when he visited her, but the entire scenario changed when Katie was shifted to a nursing home some time afterwards.

Katie’s entire demeanor and happy attitude had just disappeared, which was noticed by Rev. Dupin when he went to see her at the nursing home. She begged and pleaded to be taken back home with tears running down her cheeks. She did not get the chance to go back to her beloved home, as she passed away in the nursing home, but the entire episode had a profound effect on Rev. Dupin. He was extremely moved by Katie’s attachment to her home and her deep melancholy at being moved to a nursing home, away from her loved ones.

In a talk with Audie Cornish of the National Public Radio (NPR) he said that Katie and her emotional outpourings had left him thinking about the entire subject of elderly people and their happiness in their last days. He was seriously wondering whether there was some way whereby older people could be kept closer to their families and out of places like hospitals and nursing homes. His concern is now being addressed as a new concept called “granny pods” that is gradually becoming an alternative for the housing of the elderly.

 

In Part 2 Cohen & Oalican, LLP talk more about the concept of “granny pods” or MEDCottages. Call our attorneys to see if this is an option for you and if  Medicaid covers it.

Protecting your Primary Residence with Changes to MassHealth (Medicaid) laws

Elder law attorneys Cohen & Oalican of Boston, Andover and Raynham want to alert you that on February 8, 2006, President Bush signed the Deficit Reduction Act of 2005, which significantly changes the federal Medicaid laws. The three most important changes concern: 1) the transfer of assets to qualify for Medicaid; 2) Medicaid annuities; and 3) Medicaid’s treatment of the primary residence. This article covers the changes in Medicaid annuities.


The Primary Residence

In the past, Medicaid did not count the value of an applicant’s home in determining eligibility. This meant that an individual did not need to sell his or her home, regardless of value, in order to qualify for Medicaid. Under the new rules, however, a house valued at over $500,000 is now counted in determining Medicaid eligibility. (Massachusetts has the option of increasing this threshold to $750,000.) Under the new rules, a single person whose home is worth more than $500,000 cannot qualify for Medicaid unless he or she agrees to sell the house. However, even under the new rules, a house continues to be non-countable if a spouse, disabled or blind child, or child under the age of 21 lives there.

Conclusion

As you can see, these changes dramatically alter the Medicaid program. Nursing homes will have to work closely with residents and their families to ensure that residents are able to smoothly transition from paying privately to receiving Medical Assistance from MassHealth. As always, our office is available to answer your questions or to provide any assistance you may need.
If you would like to review the full text of the law, go to http://thomas.loc.gov/, and enter "S. 1932" in the “search bill” text box.


This is the final article in a series regarding changes the Deficit Reduction Act of 2005 has made in dealing with Medicaid (MassHealth). Thank you for putting your trust in our Elder Law legal practice, Cohen & Oalican, LLP

Boston Medicaid (MassHealth) Attorney: Medicaid Laws change due to Deficit Reduction Act : Transfer of Assets cont'd

Elder law attorneys Cohen & Oalican of Boston, Andover and Raynham want to alert you that on February 8, 2006, President Bush signed the Deficit Reduction Act of 2005, which significantly changes the federal Medicaid laws. The three most important changes concern: 1) the transfer of assets to qualify for Medicaid; 2) Medicaid annuities; and 3) Medicaid’s treatment of the primary residence.

Transfer of Assets (cont'd)


More significantly, however, the new law also changes the date on which the penalty period begins. Under the old rules, the penalty period started when the transfer was made. The new law shifts the start-date of the penalty period to the date when the person is in a nursing home and his or her funds have run out. The new law will not apply to transfers made prior to February 8, 2006. However, Congress has allowed the states to implement the statute at a later date if they choose to do so, so the effective date in Massachusetts may fall after February 8.
The easiest way to explain the change is by way of an example. Let’s assume Mrs. Smith transfers $20,000 to her grandson on March 15, 2006. On April 15, 2007, Mrs. Smith suffers a stroke and is admitted to a skilled nursing facility. Assume she spends down her assets below $2,000 as of August 2007. Under the old transfer rules, the March 15, 2006, transfer would have made Mrs. Smith ineligible for Medicaid benefits for almost three months, starting March 1, 2006, and ending at the end of May 2006. Thus under the old rules Mrs. Smith would have been eligible in August 2007. Under the new rules, however, the transfer penalty would not start until August 1, 2007 and would end in November. The question then arises: How will Mrs. Smith pay the facility if the transferred funds are gone and she is not eligible for Medicaid?

This is second in a series regarding changes the Deficit Reduction Act of 2005 has made in dealing with Medicaid (MassHealth). Thank you for putting your trust in our Elder Law legal practice, Cohen & Oalican, LLP

Boston Medicaid (MassHealth) Attorney: New Series: Medicaid Laws change due to Deficit Reduction Act

Elder law attorneys Cohen & Oalican of Boston, Andover and Raynham want to alert you that on February 8, 2006, President Bush signed the Deficit Reduction Act of 2005, which significantly changes the federal Medicaid laws. The three most important changes concern: 1) the transfer of assets to qualify for Medicaid; 2) Medicaid annuities; and 3) Medicaid’s treatment of the primary residence.

Transfer of Assets

As you may recall, Medicaid, a.k.a "MassHealth," penalizes applicants who transfer assets by imposing one month of ineligibility for nursing-home benefits for every $6,960 (as of 2005) given away. But by changing two important aspects of the Medicaid rules, Congress has imposed much stricter penalties than ever before.
Under the old rules, Medicaid would review three years (or in the case of trusts five years) of financial statements in order to identify any disqualifying transfers. This is known as the “look-back period.” The new law extends the look-back period to five years for all transfers.

This is first in a series regarding changes the Deficit Reduction Act of 2005 has made in dealing with Medicaid (MassHealth). Thank you for putting your trust in our Elder Law legal practice, Cohen & Oalican, LLP