RE: Medi-Cal clock

From: "Nelson E. Timken, Esq." <netimken@erols.com>
Subject: RE: Medi-Cal clock
Date: Fri, 3 Jul 1998 13:32:01 -0400

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My recommendation here is to speak to an ELDER LAW/ESTATE PLANNING ATTORNEY
in your area as soon as possible. If you try to get "hearsay" information
such as that which is listed below, you will be steered WRONG.

I preface what I am about to say by telling you that you should not rely on
it. I am not an estate/elder law attorney. I am an attorney and a guardian
to my incapacitated mother. I do therefore have some practical knowledge.
With court permission, we were able to transfer one of her assets before the
federal fraud statute took effect. The three year period runs from the date
of transfer. In my opinion, it is not unlawful per se to transfer assets of
an elderly person. If the elderly person is not currently incapacitated and
receiving Medicaid (not welfare!) then I do not believe that there will be a
problem, so long as the person does not become incapacitated or seek
Medicaid within the look back period, which is currently 36 months. A person
has a right to transfer assets, otherwise none of us could ever conduct any
estate planning whatsoever.  However, two things must be kept in mind. By
transferring them to a joint tenancy situation, the elderly person still has
a 1/2 interest in the asset. Therefore, Medicaid can enforce a lien against
that portion. When the asset is sold, Medicaid can come after 1/2 of the
proceeds. What many elderly people do is to transfer the asset outright,
such as a house, and the lawyer sets up a life interest for them which gives
them the right to live in the asset (house) until they die. This prevents
the children from throwing them out following the transfer.

There are many devices that can be used legally. Speak to an attorney.
Otherwise you will get advice which tells you basically, that you have no
options, which is clearly not the case.

Regards,

Nelson
http://onelist.com/subscribe.cgi/investing-list

- -----Original Message-----
From: owner-persfin@lists.xmission.com
[mailto:owner-persfin@lists.xmission.com]On Behalf Of MsProf2U@aol.com
Sent: Friday, July 03, 1998 12:29 PM
To: persfin@lists.xmission.com
Subject: Re: Medi-Cal clock


<<My 87 year old father lives with me.  I am
his only child....We recently purchased a
house jointly in which we reside....

1.  When we transferred all of my father's funds
in to joint checking and investment accounts,
does this start the Medi-Cal clock ticking on the 3 year period
re gift transfers?  If so, since it is a joint account, do
all, or only 1/2, of the funds qualify as a gift?

Do I need a letter from my father indicating that it is a gift?
Would it be better to remove his name entirely
from the accounts?

2.  We recently purchased a house that we own as joint tennants.
A non-specialist attorney I spoke to
indicated that there was some case law that set a precedent
such that if the son/daughter of the Medi-Cal recipient is living in the
recipient's house, the government would not force the sale of the house
to recover Medi-Cal long term care costs.
I'm not sure how joint tennancy would affect this, or
if the child must be a minor....>>

I suggest you talk to a specialist lawyer. There are real strict
requirements
now to spend down one's money before receiving welfare. Holding $200K
jointly
with a family member doesn't qualify as having spent money down, as it is
still accessible to the would-be welfare recipient. Furthermore, only $10K
year can be transferred without incurring gift taxes. Transferring
(basically,
"hiding") assets in entirety to receive welfare is fraud, with commensurate
penalties. Be careful!



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