So many times clients come to my office under the mistaken impression that there is nothing that can be done to protect assets from nursing home costs. Much of the popular literature gives readers the idea that unless assets are given away five years prior to a nursing home placement, it just about all goes to the nursing home. Though it is true that some asset protection strategies have been curtailed by the recently implemented Deficit Reduction Act, it is still possible in most cases to take some steps to shelter assets from nursing home costs if you follow the applicable rules and regulations.  In fact, the new law has opened up some additional planning opportunities in certain cases.

Fortunately there is still much that can be done, legally, to minimize the potentially devastating cost of nursing home care. Specific rules govern the consequences of gifting, particularly in light of the Deficit Reduction Act, and they need to be followed carefully. Mr. Gerhard advises families as to what can be transferred, and when. Exceptions to the transfer penalties exist which allow for gifting of resources under certain circumstances.

Another concern clients have is that the care being provided to a loved one will suffer when the bill shifts from "private pay" status to "Medicaid." Fortunately federal law bars such discrimination. It is illegal for a Medicaid approved nursing home to change the level of care provided based on the source of payment. 

Some families mistakenly believe that transferring all assets to the healthy spouse can protect them from the potential nursing home costs of the sick spouse. This is another Medicaid myth. Medicaid law generally deems the assets of one spouse to belong to the other. Although titling the assets in this way can be advantageous in some cases for other reasons, it generally does nothing to protect resources from nursing home costs.

Another Medicaid myth involves "jointly owned accounts." Some parents add a son or daughter to a bank account believing that doing so will protect at least half of the account from nursing home costs. Not true. Under Pennsylvania law, a joint deposit account is considered owned in proportion to the contributions to the account. Unless the son or daughter can prove to the Medicaid authorities that the funds in the account are their own, the resources are attributed to the parent and considered "available, non-excluded resources" that very well may need to be spent-down on nursing home or other costs.

Call elder law attorney Robert C. Gerhard, III today to make an appointment to answer your specific questions and dispell any Medicaid myths that may be on your mind.