When someone needs long-term care and applies for Medicaid benefits, there is a look-back period. The Medicaid agency will look back a number of months immediately preceding the otherwise eligible date, which is usually when the applicant is institutionalized and has submitted a Medicaid application. For California, the look-back period is thirty months; for all other states, the look-back period is sixty months.

If the applicant made transfers for less than fair market value during the look-back period, then the assumption is that the transfers were made in order to qualify for Medicaid services by getting the applicant’s resources down to the pertinent individual resource allowance. Then, the applicant would be assessed a penalty period, where they would not be eligible for benefits for a certain period of time. However, the applicant can rebut this assumption by showing the assets were transferred for some other purpose than to qualify for Medicaid long-term care services. One way the applicant can try and rebut the assumption is to show that they were not sick and in need of care when the transfers were made, thus they were not contemplating Medicaid eligibility. Another way would be to show a habit of gifting before Medicaid was needed.

Medicaid laws can be cumbersome and tricky. Federal statutes set out the framework for certain Medicaid eligibility rules, and states can interpret them differently. One such rule can be found in 42 U.S. Code § 1396p(d)(4)(C), which covers transfers to pooled trusts. Based on differing interpretations of this statute, some states impose a transfer penalty when an individual over age 65 transfers funds within the look-back period to a pooled trust; some states do not. Minnesota has the former rule, but in a recent case, it did allow a Medicaid applicant over age 65 to transfer funds into a pooled trust without the imposition of a transfer penalty.

In this case, David moved into a long-term care facility. His siblings sold his home. David petitioned a court to transfer his proceeds into a pooled special-needs trust. The court issued an order allowing the transfer. Disbursements from the trust were limited to the sole discretion of the Trustee, and they could only be made for items or services not covered by Medicaid. David was 65 years old at the time the funds were transferred to the pooled trust. Because Minnesota penalizes transfers to pooled trusts for folks 65 years and older, David was assessed a penalty period where he wasn’t eligible for long-term care Medicaid benefits. David appealed.

Malpractice. The very word sends shivers down the spines of attorneys. Attorneys, as humans, can’t be expected to be perfect. Yet professionally, they must be. When an attorney gives erroneous advice, there are consequences. A client can, among other things, sue the attorney for malpractice and recoup damages. But there are rules about such malpractice claim. For one, it must be filed within a certain time frame, called the statute of limitations. But when does the statute of limitations start to accrue?

This issue was recently litigated in Missouri. Here, attorney Joseph was doing some legal work to get Ruth eligible for long-term care Medicaid. In doing so, he recommended that Ruth transfer all of her assets to her nephew and his wife, the Duvalls. Then, the Duvalls “executed a quitclaim deed granting Ruth’s Trust a 98% interest in the Duvalls’ home.” The Duvalls then asserted that Joseph told them that Ruth’s property would not be subject to estate recovery. Ruth began receiving Medicaid benefits. Such legal work took place in 2002.