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Elder Law Center One Essex Street Saugus, Massachusetts 01906 Telephone 781.233.4444 Fax 781.231.2222
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December 27, 2007
CARING FOR SINGLE ELDERS IN NURSING HOMES
Single or unmarried elders who enter a nursing home face a financial crisis when their money runs out. Under our current rules, non-married elders who seek MassHealth (Medicaid in Massachusetts) coverage for their nursing home care must privately pay the nursing home until they have less than $2,000 in assets, and after that point they may only keep $72.80 per month out of their income to pay for their personal needs. The remainder of their income goes to the nursing home. How far does $72.80 go for someone’s personal needs? Well, they have to pay for their own telephone and cable. If they want their hair done, that also comes out of this same allowance. Holiday cards and gifts can be bought at the nursing home, and don’t forget to save some money for the occasional bingo game. OK. You get my point; there just isn’t enough money to go around. When a nursing home resident needs hospitalization, MassHealth will pay the nursing home for up to 10 days to hold the bed while you are hospitalized. If your hospitalization last longer than 10 days, you either need to privately pay, or you lose your room. Many nursing home residents have family that visits, and gives them additional money to pay for these necessities and bedholds. But what if there is no family around or the family is unable to afford to give the nursing home resident these additional funds? There is an option. Instead of paying the nursing home privately until you have less than $2,000 in assets, you might consider transferring the bulk of your assets to a trust that will be able to pay for these necessities when there is no where else to get the money. After your death, the State will have the right to get reimbursed for the money that they have paid for your nursing home care. This is known as estate recovery. Example: “Rose’s” health has declined and needs nursing home care. Her assets consist of $75,000 in the bank. What should she do? Answer: Because of the law change on February 8, 2006, Rose may not make any gifts to her family. Prepaying for her funeral should be done at this time. That will get rid of about $10,000 and she will still have about $65,000. For the remainder of her money, her choices are to either privately pay the nursing home until she has less than $2,000 in assets or place her assets in a pooled trust where the funds will be available for her supplemental needs for the rest of her lifetime. Upon death, MassHealth will get paid back from the remaining funds in her trust through the estate recovery process. Putting the funds in this trust is an acceptable method of spending down her assets to qualify for MassHealth. Due to the elimination of the ability of seniors to make gifts within five years of needing nursing home care, more and more seniors who face nursing home care will take advantage of the benefits of transferring their remaining assets to a pooled trust. This trust fund will allow them to be able to afford necessities when they have run out of money. 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
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