Fredrick P. Niemann, Esq., a NJ Medicaid Eligibility Attorney

Recently, we posted an article about a Dad who gifted a large sum to his children and within 6 months needed long term care. Because the money had been spent and could not be returned I had to explain to the daughter that Dad would not be eligible for Medicaid for 4 and years. A complete disaster. But this week lets take a look at a success story, long before long term care and Medicaid were needed.

Mary contacted our office concerning her mom who was living in an assisted living facility. Mom had transferred her assets to her 3 daughters. They had begun to spend some of the money on Mom’s care but had also opened and closed accounts, moving, combining and commingling assets. Over time it would have been very difficult to follow the paper trail and establish with Medicaid that Mom’s money had been spent for her care, and not gifted to the children. Unlike last weeks family, however, Mary’s early contact with us allowed sufficient time to correct this paper maze.

We counseled Mary that the assets had to be returned, and, thankfully, although some had been spent on Mom’s care, she and her sisters still had possession of the balance. We guided Mary on the records that she needed to obtain in preparation for the anticipated Medicaid application. She prepared invoices and documentation showing that the cash withdrawals were not gifts, but payment for services, including a statement from the facility. Mary had been paying the facility bill on her credit card and then taking money from Mom’s account (which was titled in Mary’s name). We had her go back through her records and copy the credit card bills with those charges and match up payments back to her from “Mom’s account. We counseled her on a better way to make those payments.

Finally, Mary and her sisters had moved money from one account to another, for convenience, a better interest rate or to keep FDIC insurance coverage. Without recognizing it, however, they were muddying the paper trail. You see, Medicaid requires as many as 5 years of financial records to show how money has been spent. Mary and her sisters didn’t realize the problems they were creating. Our staff painstakingly had to document all the transfers from one account to another and transfers in and out of each account.

As I said, this was a success story. We provided Medicaid with details of each transaction, backed by supporting documentation. Every dollar had been accounted for. Financially, the family can rest easy that Mom’s care is paid for and the nursing facility, which receives those Medicaid benefits, is happy that their resident went from private pay to Medicaid without interruption of payment. An example of the way things can work if you have someone with knowledge guiding you through the process.