The meaning of access to a financial account has recently been litigated in New Jersey. In a non-binding decision, the Superior Court of New Jersey disregarded the Medicaid applicant’s argument that she was physically and cognitively unable to access a joint account – ultimately leading to the inclusion of the resources against her for eligibility determination purposes.

Medicaid Basics

Medicaid is a program that makes medical care payments on behalf of the needy. When applying for long-term care benefits, neediness depends upon the applicant’s income and resources – the ability to contribute to the cost of their own care. Which resources are countable vary amongst states.

There are many ways to approach Medicaid eligibility: spending down assets, exempt transfers, the creation of certain trusts, and general proactive planning before the look-back period. Some tactics, however, may not be as effective as they once were.

Illinois Divorce Penalty

In a recent, non-binding Illinois opinion, a man was penalized for transferring assets to his ex-wife via a divorce agreement. Harold was 76 years old when he entered long-term care due to Parkinson’s disease. Four months after entering the care facility, he divorced his wife of 50 years. As outlined in the settlement agreement, he kept his pension, Social Security benefits, and $123,000 cash and other assets. His ex-wife kept her Social Security benefits, $88,000 in cash and other assets, the car, the $325,000 house, and some non-marital property.

Overcoming the presumption of improper transfers within a look-back period may be as simple as a keeping a few receipts.

Every lawyer should recognize the importance of documentation – an original of a client’s will; notes during client meetings or with witnesses; court documents; emails; receipts for travel expenses and expenditures. Access to these records legitimize and provide accurate proof of particular facts and figures. Failure to maintain access to these sorts of documents creates an avoidable challenge, particularly for those in the legal field.

Qualifying for Medicaid

In terms of Medicaid qualification, documentation of expenses can be critical to whether penalties are assessed on applicants for transfers of wealth. Parties assisting applicants may also risk breaching fiduciary duties when they cannot provide evidence of legitimate transfers of assets – above all, when this failure results in a large penalty for the person in need.