Be Careful Gifting Money back To A Parent!

When a parent or loved one gifts assets to you, they will become ineligible to apply for Medicaid for a period of time.  The ineligibility period will begin when the person who made the gift applies for Medicaid.  The length of the ineligibility period will be equal to the number of days the gifted amount would have paid for the person’s care in the nursing home had they not given it away.   After reviewing the New York Case below, you should be aware that if you return money to or use the gifted money to benefit the person who made the gift, the ineligibility period may not be reduced unless the funds are actually used to pay for the person’s nursing home fees.  This is a really important issue that you have to monitor closely.  If the gifted assets are not available to pay for the person’s care during the ineligibility period, the person might not receive the proper care or any care during that time unless you are willing to pay for their care out of pocket.  Based on the case below, you could find yourself in the unenviable position of paying for Mom or Dad’s care with your own assets because the asset protection plan was not managed properly.

THE CASE:  A New York appeals court determines that a Medicaid applicant’s penalty period should not be reduced even though the applicant’s daughter used some of the transferred money to pay for her mother’s assisted living facility. Weiss v. Suffolk County Dept. of Social Services (N.Y. Sup. Ct., App. Div., 2nd Dept., No. 2013-09464, 5418/13).

Martha Weiss transferred $78,236.74 to her daughter Beverly Blier. Ms. Blier paid $41,600 to the assisted living facility where Ms. Weiss resided. Ms. Weiss entered a nursing home and applied for Medicaid. The state imposed a 6.84 month penalty period based on the transfer to Ms. Blier.

Ms. Weiss appealed, arguing that the penalty period should be reduced because Ms. Blier returned some of the transferred money to Ms. Weiss by paying for her assisted living facility. The state denied the appeal, and Ms. Weiss appealed to court.

The New York Supreme Court, Appellate Division, dismisses the appeal, holding that the penalty period was appropriate. According to the court, while returned assets can be used to reduce a penalty period, under state regulations, the return of assets applies to the use of assets to pay for an applicant’s nursing facility services, not for an applicant’s residence in an assisted living facility.

For the full text of this decision, go to:

For assistance dealing with developing a comprehensive nursing home asset protection plan in Pennsylvania, please contact Douglas L. Kaune, esquire at 610 933 8069 or email him at Doug’s entire practice is focused on elder law, estate planning, trust planning, estate admisitration and protection of clients’ assets from nursing home spending and estate and inheritance taxation. Unruh, Turner, Burke & Frees, P.C. is a full service law firm which has three convenient office locations in Phoenixville, West Chester and Paoli, Pennsylvania. The firm primarily services clients in Chester, Montgomery, Delaware, Philadelphia, Bucks and Berks Counties, but can represent clients throughout Pennsylvania.