Morton Legal Blog

Protecting the Home

Nursing home residents do not have to sell their homes in order to qualify for Medicaid, as long as the nursing home resident intends to return home. Additionally, the house may be kept if the Medicaid applicant's spouse or another dependent relative lives there.  However, after a Medicaid recipient dies, the state must attempt to recoup from his or her estate whatever benefits it paid for the recipient's care. This is called "estate recovery."

Medicaid 60 Month Rule

Congress has established a period of ineligibility for Medicaid for those who transfer assets. This period of ineligibility is determined by dividing the amount transferred by what Medicaid determines to be the average private pay cost of a nursing home in your state. However, state Medicaid officials will look only at transfers made within the 36 months for transfers made prior to February 8th, 2006, and 60 months for transfers made on or after this date. Thus, if you can plan ahead and make transfers well in advance of needing Medicaid (up to five years, depending on when you are transferred the money), the transfers will not affect your Medicaid eligibility.

State May Not Recover Medicaid Payments from Estate of Spouse

A Tennessee appeals court rules that the state may not recover Medicaid payments from the estate of a community spouse who received assets from an institutionalized spouse who predeceased him, leaving no estate.In Re: The Estate of James Clifford Smith (Tenn. Ct. App.)

Medicaid Spending Decreases

For the first time since its creation in 1965, Medicaid spending actually declined in 2006, a recent USA Today article recently reported.  The drop in spending on the health care program for the poor is due in large part to aggressive program changes implemented by states, including the recently enacted Deficit Reduction Act of 2005.

Fifth Circuit Reverses Tax Court in McCord: Gifting Using Formula Clauses

This article examines the appeal of the McCord decision, in which the Fifth Circuit reversed the Tax Court decision and allowed formula value clauses. The decision allows you to tie the amount of the gift to the value of the underlying asset, such as an FLP interest. So, it could say, I give $1 million worth of my FLP to my children and the amount over that to charity.