Prior to making application for Medicaid benefits for Mrs. Williams, Mr. and Mrs. Williams made two (2) transfer of their assets as follows:
1. They transferred approximately $17,000.00 to heir son/step-son (1).
2. They transferred title to their residential home valued at $89,500.00 to the Bobby Williams Family Trust (a revocable trust).
Thereafter, Mrs. Williams filed for full Medicaid benefits and entered a nursing home facility. The application was processed and approved, but the County Department of Job and Family Services (CDJFS) imposed a period of restricted Medicaid coverage in the amount of 17.7 months (2), which meant Medicaid would pay Mrs. Williams monthly nursing home bill during the 17.7 months. The CDJFS determined that the two (2) asset transfers that Mr. and Mrs. Williams made were within the applicable sixty (60) month look-back period, and as such, were improper transfer of resources.
The case involved many additional facts and legal arguments, but the important point is quite simple, and involves potential perils of transferring the residential home to the revocable living trust. The entire value of the home would have been treated as an exempt resource had the home remained in Mr. and Mrs. Williams individual names. This would have meant that Mr. and Mrs. Williams would have been able to shelter the entire $89,500.00 value of the home, while having no impact on Mrs. Williams eligibility for Medicaid benefits, and allowing Mr. Williams to reside in the residential home.
By simply transferring the home to the family trust, Mr. and Mrs. Williams created a period of Medicaid ineligibility, which could have been avoided.
(1) The $17,000.00 transfer was an improper transfer of resources, and caused an period of restricted Medicaid coverage of about 2.82 months.
(2) The 17.7 month was ordered modified by the Court.