With Long Term Care, Free Advice Is Expensive
When I first began working in elder law about 14 years ago, information on Medicaid for seniors facing nursing home and long term care costs was difficult to obtain. Gifting rules left a wide margin. The rules were fairly complicated but consistent. Much of this has changed.
Fourteen years later many people know someone who knows someone who received Medicaid. Many more people believe they are experts. The “experts” who might be neighbors, friends, relatives, medical providers, or social workers provide a continuing stream of “free” advice. The results that I sometimes see are chilling. These have led me to believe that, in long term care, as in some other specialties, nothing is more expensive than “free” advice. Here are some real examples.
Recently a family member of a person who was receiving Medicaid in a nursing home approached me. An agency in another County had assisted with the application at the time it was needed. Their parent now was close to dying and there was no money for a funeral. I wanted to know whether the agency explained that they were permitted to set up an irrevocable burial reserve with their parent’s funds before going on Medicaid. They were not told this. I asked how much remained in the parent’s account now. There were no funds. The parent would have been entitled to keep either $2,400 or $8,000 in her name and still receive Medicaid. This was not explained either. Since there was no way to go back now to recover the funds, “free” advice in this case would cost the family the price of the funeral which in this area can easily run $7,000 or $8,000 or more. This in addition to the sadness of dealing with their tragic personal loss.
If $8,000 seems costly for free advice, this is minimal compared to advice given on housing. Seven years ago, in October, 2003, an article in Main Line Today by Holly Love, “On Time and Money,” in the course of describing what elder law attorneys do, featured the case of our clients, the Troop family. Through almost Herculean effort and by moving in with her parents, wife and husband were able to keep Louise’s parents, one with Alzheimers and the other with Parkinson’s disease, at home well beyond the time when they would otherwise have gone to nursing homes. Since the elderly parents had minimal funds, the family wondered what my office could do. I remember advising them that, because they fit the description of a little known federal category, they could save the family home and we did.
Unfortunately, many people think that, simply by transferring the family home into the name of children, they can protect it without more. Actually, if this is done improperly without fitting one of the legal exceptions, the government would expect adult children to pay back the value of the interest transferred before their parent would be covered under Medicaid. This could be hundreds of thousands of dollars. Free advice can be expensive.
It can get more complicated. About two years ago, while walking in my neighborhood, I came across a neighbor, someone who did not normally express strong feelings, seriously distraught and sitting on his front steps. What I learned was that, after caring for his mother at home for several years, the house was going to be sold because of a government claim and he would need to move.
A social worker had told him that, if he lived in the house and cared for his mother, he could keep the house. Generally speaking, this can be true if request is made for the Caretaker Child exception at the time of a Medicaid application and the house is actually transferred using this exception and the family provides proof. None of these things were done. When an estate was opened after his mother died, the government claimed for the cost of the medical bills under estate recovery. The house eventually was sold.
Recently, I chatted briefly with a man outside our local Wawa. He related it was sad when his mother died but the most tragic result was that they lost the house and his brother, who had been disabled his entire life, had to move.
Unfortunately, I told him there was an exception for disabled children and it was not necessary to lose the house. He had a lawyer but obviously one who did not specialize in this area.
Sadly, many people who receive free or lower cost advice have no idea even what the results could have been and what they may have lost.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.