NURSING HOME PLANNING FOR THE PROCRASTINATOR
Written by Todd E. Lutsky, Esq., LL.M
Cushing & Dolan, P.C., Attorneys at Law
Planning well in advance of entering a nursing home is always the best approach, for it takes five years to protect assets from the cost of long term care. The single best way to protect your assets, whether they are real estate assets such as your home, vacation home, rental property or your investment portfolio, is to transfer or retitle such assets to an irrevocable Medicaid trust. However, we all understand that folks tend to procrastinate and/or are simply faced with an emergency situation whereby a loved one suddenly needs nursing home care and no advanced planning has been done. The balance of this article is designed to offer some solutions that can be implemented last minute in an effort to save or at least slow the financial bleeding of the assets to the nursing home.
Look back provision is extended to 5 years from 3 years for all transfers – 130 CMR 520.019(B)
This regulation indicates that the transfers of resources are subject to a look back period, beginning on the first date the individual is both a nursing facility resident and has applied for/or is receiving MassHealth standard. This period generally extends back in time for 36 months. For transfers of resources occurring on/or after February 8, 2006, the period extends back in time for 60 months. The look back period for transfers of resources from a revocable trust to someone other than the nursing facility resident, or transfers of resources into an irrevocable trust where future payment to the nursing facility resident is prevented, is 60 months.
Planning Note: This 60 month look back period now applies for all transfers whether they are made outright to an individual, into an irrevocable trust or out of a revocable trust. This means that asset so transferred will not be fully protected from nursing home costs until the expiration of this five year waiting period following the transfer. Remember the old rule was only a three year wait, but by planning now you would likely be grandfathered into this new five year waiting period even if the law changes in the future, and such a bill is pending in which they are considering making this waiting period 10 years. This bill is known as house bill 6300. This also helps us understand why planning in advance of a health crisis is so important as otherwise all assets could be lost.
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