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December 13, 2007
YOU SHOULD KNOW BETTER
Last week a decision was handed down from the Office of Medicaid, Board of Hearings, that is a slap in the face to every senior in Massachusetts. Did you ever think that giving your grandson $25 or your granddaughter $100 could disqualify you from Medicaid? Well, read on.
Those, who may ever need nursing home care, must be very careful in making gifts. This applies to family gifts as well as gifts to charities.
The case dealt with an 85 year old woman who had given her granddaughter $100 for Easter and $200 for Christmas. Her health was failing and on September 8, 2006 she entered a nursing home. She privately paid the nursing home for the next eight months, until May 10, 2007. At this point, she had given the nursing home all of her money except for less than $2,000, her allowable asset limit to qualify for MassHealth (Medicaid in Massachusetts).
When she applied for MassHealth to pay for her nursing home expenses, the MassHealth caseworker decided that these two gifts should result in a disqualification period from benefits. An appeal was filed requesting that she not be penalized for these small holiday gifts.
The hearing decision stated that any transfer (gift) that occurs during the five year look back period is a disqualifying transfer, regardless of the amount. The hearings officer went on to say, regarding the $200 Christmas gift, that this 85 year old nursing home resident should have known that she would be needing MassHealth in the future and that making gifts while a resident of a nursing home is not allowed. The 85 year old was not penalized for the smaller gift of $100 because she was not in the nursing home at the time of the gift and it was made contemporaneously with the Easter holiday.
So, what can we learn from this decision? I guess the first thing is that if you are in a nursing home, even if privately paying, you may not make any gifts of any amount. Secondly, if you are not in a nursing home, you may make small gifts as long as they coincide with either a holiday or a special event like a birthday, wedding or graduation. Although technically these are disqualifying transfers, MassHealth has generally taken the position that these small gifts will be ignored as long as you are not in the nursing home when they are made.
This article gives general information and not specific advice on individual matters. Persons wanting individualized advice on matters discussed should contact an advisor experienced in those matters. To the extent this article provides information on legal matters, it is based on law in effect in Massachusetts on the date of posting (laws in effect in other states are often quite different).
Ronald H. Surabian is a CPA and attorney who works at the Elder Law Center in Saugus, Massachusetts. He also holds Masters in accounting and a Masters in tax law. He currently serves on the board of directors of the Massachusetts Chapter of the National Academy of Elder Law Attorneys. If you have any questions please call me at the Elder Law Center, One Essex Street, Saugus, MA 01906 (781)233-4444. To view this or any prior article, please visit our web site at www.elderlawcenter.org