The price of nursing home care in New York is staggering. It is not uncommon for a stay to cost upwards of $15,000 – $20,000 per month. This is a burden that many New York seniors can not afford to pay. After all , many local residents are only living on small fixed incomes, and coming up with $180,000 – $240,000 per year to live in a skilled nursing facility is unthinkable.
For most resident the only alternative is support via the New York Medicaid system. But residents can usually only qualify for Medicaid if their non-exempt assets are “spent down.” In our state, the allowable amount of total assets is only $14,550. There are complex rules about what assets count toward this amount, but a NY Medicaid lawyer can explain whether things like a long-time family home can be saved or if retirement accounts must also be drained.
To calculate the amount of assets that a senior has, the NY Medicaid system will conduct a “look-back” to examine financial transactions completed by the senior within the last five years. The purpose of this look-back is to ensure that transfers are not made simply to keep assets in a family while making it appear as if the senior actually spend down resources. In other words, you cannot transfer stocks or a saving account to an adult child right before applying for Medicaid. Those transfers, if they happened within five years, will be picked up during the application process and likely trigger a penalty period where the senior is not eligible for Medicaid.
However, that is not to say that any asset spent by seniors at this time will count toward a penalty. For example, it is not uncommon for adult children to help out with senior assisted living costs before the senior officially moves into a nursing home or seeks qualification for Medicaid. Can those costs paid by adult children be recouped later, without being considered a “gift” via the look-back period?
If records are properly kept of the adult children’s support, then those funds can be re-couped without triggering a Medicaid penalty. For example, if adult children provided $10,000 in support over a few years for the senior, that money may be paid upon the sale of the senior’s house or stocks or other assets. If proper records were kept which show that the $10,000 transfer back to the children was a re-payment (and not a gift), then it may not be counted by Medicaid to trigger a penalty.
Obviously there are countless other scenarios where similar issues may come into play. In virtually all of them, however, proper record-keeping is critical. All of these claims must be proven, and a paper trail must exist which shows the nature of the transfer. It is always prudent to plan as far ahead as possible, keeping records and documenting details so that the family is best-positioned no matter what the future holds.