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.

When applying for long-term care Medicaid, there will be an analysis to determine if the applicant is eligible. Is the applicant medically and financially eligible? For the financial piece of the analysis, there are strict rules regarding how many assets an applicant can have and still qualify for long-term care Medicaid benefits, such as nursing home care or care provided in the community under a Medicaid waiver. But as of what date should the state conduct this financial analysis of assets? This date is called the “snap-shot” date.

How does the applicant know when the snap-shot date is? Federal law (42 US 1396r-5 (c)) dictates that the snap-shot date is the first day that the applicant was institutionalized for 30 consecutive days. “Institutionalized” could mean either a hospital stay, nursing home stay, or combination of both. But the stay must have been 30 days consecutively, with no interruption.

A common strategy employed for Medicaid qualification purposes is to turn an asset of a married couple into an income stream for the community spouse. This is due to the name on the check rule, which states that whomever is listed as the payee on the check (or income payment), that is who the income is attributed to. Couple this with the fact that in most states a community spouse can have unlimited income without jeopardizing eligibility for an institutionalized spouse, and the result is a viable strategy for decreasing assets for eligibility purposes. The name on the check rule came under fire in a recent case, but emerged victorious.