The VA Aid and Attendance program – where veterans and their surviving spouses can receive a special pension to cover medical expenses – has certain financial eligibility requirements, which include an income and asset test. In short, qualifying applicants cannot own more than a certain level of assets (based in part on their life expectancy).
What if your asset level is too high to qualify? Well, you might think that simply gifting your assets away is the right way to solve the problem. However, while the VA does not apply any penalty period for prior gifts, giving away your assets can have catastrophic effect on your ability to qualify for Medicaid in the future. That’s what I call, “The Medicaid Ticking Time Bomb”!
Now, I can hear some of you already. You’re saying, “The ‘giving away assets problem’ is only for people looking to qualify for Medicaid. That’s not me (or my spouse or Dad). He’s doing fine at home.” You may be right. For now.
Most veterans who are housebound or in assisted living do not realize that their health care needs and expenses are NOT going to stay the same very long. Unfortunately, the aged and frail veteran has begun an end-of-life journey that is reasonably foreseeable. A housebound or assisted living facility resident has a 90% probability of needing to go on to skilled nursing home care within 2 to 3 years. The cost of skilled nursing home care can easily run up to $10,000 per month. In addition, the veteran will be in the nursing home an average of 2.5 years before passing away. It is highly likely that the veteran’s family will need to apply for Medicaid benefits to pay the nursing home costs.
Medicaid imposes a significant penalty period of ineligibility if a senior has given away any assets within five years of applying for Medicaid assistance. This means that if you were to ignore our advice and transfer assets to qualify for Aid & Attendance, you could become ineligible for Medicaid, which, as you can now see, 90% of VA claimants will need in under five years.
Any time a veteran gives away assets to qualify for VA benefits, he or she is setting a Medicaid penalty ticking time bomb. A VA-accredited elder law attorney who has substantial experience with the Medicaid eligibility rules for your state can tell you if you’re setting yourself in harm’s way.
A VA-accredited elder law attorney is a trustworthy guide for the client and the client’s family for all of the significant problems that may arise as the senior travels this pathway. You never want to run out of money and out of options before you run out of breath.
Posted by Victor Medina, Medina Law Group, LLC