Question & Answers

How are gifts treated when a Nursing Home resident applies for Medicaid in Michigan?

QUESTION:  How are gifts treated when a Nursing Home resident applies for Medicaid in Michigan?

More specifically, when a person who resides in a nursing home applies for Medicaid assistance in Michigan, what is classified as a gift and how are prior gifts treated? 

Short Answer:  A gift is treated as an improper transfer of assets that will cause a delay in receiving Medicaid benefits despite meeting all of the Medicaid eligibility requirements. 

Explanation:  First, let’s define a “gift” or in Medicaid terms, a “divestment”.  A divestment is defined, with a few exceptions, as a transfer of an asset by a Medicaid applicant or spouse (or someone acting on behalf of the applicant or spouse) to someone else, within the last five years, for less than fair market value.  A common example may be that the applicant gave his or her car to a family member for nothing in return.  You should also know that selling the same car to the family member for less than the fair market value is also considered a divestment. 

So what happens when a Medicaid applicant who resides in a nursing home is deemed to have “divested” assets?  Essentially, once the applicant is deemed to have met all of the Medicaid eligibility requirements including spending down their assets to below the required amount, the Medicaid benefits will not begin until the divestment penalty period runs out.  Unfortunately, the common outcome is that a person who has a divestment penalty period assessed will generally be forced to use other protected assets, such as the equity in their home, to cover the nursing home costs during this period. 

Note: The above discussion is based off of information available as of January 2018 and is subject to change at any time.  Oftentimes engaging an experienced elder law attorney will provide the Medicaid applicant and his or her family with the expertise needed to ensure all proper actions are taken before and after applying for Medicaid and that the Applicant and family properly comply with the Federal and State laws and regulations.

Please note that above question assumes Michigan law, rules, and regulations apply.  Also note that the above question is intended for education and informational purposes only and not intended as legal advice.  Every situation is vastly different and thus the need for one-on-one legal advice from an experienced attorney.  Every reader of this article is encouraged to seek out an experienced attorney to advise on their specific circumstances. 

What is a Conservatorship?

More specifically, what is a Conservatorship over an adult person? 

Short Answer:  A Conservatorship is the Court directed process of appointing a person to manage the assets, funds, and income for an individual in need of assistance. 

Explanation:  When a person reaches a point where they are unable to make informed decisions for themselves, (for example that person may no longer be able to properly manage their bank accounts, pay their bills, or may be in danger of financial exploitation), a Conservatorship over that individual may be the appropriate action.  The process of obtaining a Conservatorship will require a Judge to review the situation, determine the appropriateness of the Conservatorship, and order that a Conservator be appointed to act on behalf of an individual in need of oversight. 

Note: Conservatorship should not be confused with Guardianship, which gives authority to act on one’s behalf regarding their personal needs such as living arrangements and medical care.

Caution:  Because a decision to grant Conservatorship will remove certain rights of an individual, Judges do not take the decision lightly and will want to be thoroughly convinced that the Conservatorship is the appropriate action to be taken.  Anyone who considers such an action should first determine whether there is a viable alternative to a Conservatorship that does not remove the rights of the individual such as implementing an already executed Durable Power of Attorney.  If there appears to be no alternative, the person taking such action should be thoroughly educated in the process of Conservatorship as well as the responsibilities of a Conservator as the Court will hold that person responsible for all decisions and actions taken.  Oftentimes engaging an experienced elder law attorney will provide the proposed Conservator with expertise needed to ensure all proper actions are taken before and after appointment and that the Conservator properly complies with the laws and regulations.

Please note that above question assumes Michigan law, rules, and regulations apply.  Also note that the above question is intended for education and informational purposes only and not intended as legal advice.  Every situation is vastly different and thus the need for one-on-one legal advice from an experienced attorney.  Every reader of this article is encouraged to seek out an experienced attorney to advise on their specific circumstances. 

What is a Guardianship?

QUESTION:  What is a Guardianship?

More specifically, what is a Guardianship over an adult person? 

Short Answer:  A Guardianship is the Court directed process of appointing a person to take over certain decision making authority for an individual in need of assistance. 

Explanation:  When a person reaches a point where they are unable to make informed decisions for themselves, (for example that person may no longer be able to handle their daily affairs such as forgetting to take medicines, inability to engage in daily activities such as cooking and bathing, struggling to care for themselves medically, and perhaps may be a danger to themselves or others), a Guardianship over that individual may be the appropriate action.  The process of obtaining a Guardianship will require a Judge to review the situation, determine the appropriateness of the Guardianship, and order that a Guardian be appointed to act on behalf of an individual in need of oversight. 

Note: Guardianship should not be confused with Conservatorship, which gives authority to act on one’s behalf regarding their assets, funds, and income.

Caution:  Because a decision to grant Guardianship will remove certain rights of an individual, Judges do not take the decision lightly and will want to be thoroughly convinced that the Guardianship is the appropriate action to be taken.  Anyone who considers such an action should first determine whether there is a viable alternative to a Guardianship that does not remove the rights of the individual such as implementing an already executed Medical Patient Designation form.  If there appears to be no alternative, the person taking such action should be thoroughly educated in the process of Guardianship as well as the responsibilities of a Guardian as the Court will hold that person responsible for all decisions and actions taken.  Oftentimes engaging an experienced elder law attorney will provide the proposed Guardian with expertise needed to ensure all proper actions are taken before and after appointment and that the Guardian properly complies with the laws and regulations.

Please note that the above question is intended for education and informational purposes only and not intended as legal advice.  Every situation is vastly different and thus the need for one-on-one legal advice from an experienced attorney.  Every reader of this article is encouraged to seek out an experienced attorney to advise on their specific circumstances. 

What is Probate?

QUESTION: What is Probate?

More specifically, what is Death Probate?

Short Answer: Death Probate is the process of transferring one’s assets that do not transfer automatically upon death.

Explanation: When a person dies, they generally leave behind the assets they accumulated. Assets that do not cease to exist upon death (such as a pension), are not jointly held with another living person or entity (such as a house or bank account), do not have a beneficiary listed (such as a bank account or life insurance), or are not included in a Trust are generally included in our “Estate”. These Estate assets need further action and someone with authority to transfer them to the desired recipients. Probate lends the authority to the person and controls the process of transferring these assets. Please note that a “Last Will and Testament” does not avoid the Probate process but rather is the “instructions” for the Probate Court and Personal Representative.

Caution: There are many techniques to transferring assets after death, all of which have very different intended and unintended consequences, often times potentially very costly. Before engaging in estate planning, one should always consult with an experienced Estate Planning Attorney who focuses on this type of law.

Please note that the above question is intended for education and informational purposes only and not intended as legal advice. Every situation is vastly different and thus the need for one-on-one legal advice from an experienced attorney. Every reader of this article is encouraged to seek out an experienced attorney to advise on their specific circumstances.

If I need to enter a Nursing Home and apply for Medicaid, will the Nursing Home or Government take my home?

QUESTION: If I need to enter a Nursing Home and apply for Medicaid, will the Nursing Home or Government take my home?

Short Answer: Strictly speaking neither the Nursing Home nor the Government will take a Medicaid recipient’s home, but beware as this is not entirely accurate.

Explanation: The Medicaid program has a set of rules governing a Medicaid recipient’s home located within BEM 400. As long as the home fits within those rules, the Medicaid recipient may keep the home while receiving Medicaid benefits.

Caution: Beware of Michigan’ Estate Recovery program. While a Medicaid recipient may keep their home during their lifetime, the equity in the home may still be at risk. The Estate Recovery program was implemented by the State of Michigan and designed to recover the assets of a Medicaid recipient for purposes of paying back the State for costs related to the Medicaid recipient’s care. If a Medicaid recipient dies and their home passes through the Probate process, the State of Michigan is at liberty to place a lien on the home equal to the total costs expended for the Medicaid recipient. This means that even though the home was protected during the Medicaid recipient’s lifetime, the children may not receive some or all of the equity value in the home. Before engaging in Medicaid planning, one should always consult with an experienced Elder Law Attorney who focuses on this type of law.

Please note that the above question is intended for education and informational purposes only and not intended as legal advice. Every situation is vastly different and thus the need for one-on-one legal advice from an experienced attorney. Every reader of this article is encouraged to seek out an experienced attorney to advise on their specific circumstances.