New Jersey Medicaid Planning
On behalf of David Whitlock at Whitlock Canter LLC
One of the unfortunate truths facing New Jersey’s and New York’s elderly population is the possibility of needing assisted living or nursing home care. With the cost of nursing homes reaching upwards of $12,000 per month, all of the wealth a person has worked hard to save over their lifetime can be lost to pay for their nursing home care. Careful planning by an experienced elder law attorney can help protect your assets from being entirely consumed by nursing home costs and allow you to pass more of your savings to your family and other loved-ones.
Congress has established a period of Medicaid ineligibility for those who transfer assets. In February of 2006 President Bush signed into law the Deficit Reduction Act (DRA) that drastically changed the eligibility rules for those who make such transfers. Particularly the “look-back” period – the period for which Medicaid can inquire into someone’s financial records, has been increased from 36 months to 60 months for transfers occurring after February 8, 2006. In addition, the DRA changed the time when the period of ineligibility caused by transfers (commonly referred to as the “penalty period”) commences. Under prior law, the “penalty period” began when a transfer of assets was made. Under the DRA, the “penalty period” does not begin until all of a person’s funds are exhausted and that person is clinically eligible for Medicaid benefits. This change in the rules made it much more difficult to protect assets once a person is close to the time of needing nursing home care. In light of the changes in the law instituted by the DRA, transfers should be made carefully — with a complete understanding of all the legal and financial consequences. For example, those who make transfers must be careful not to apply for Medicaid before the 60 month “look-back” period has expired without first consulting with an experienced elder law attorney.