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HASTE MAKES WASTE
This is a true horror story for the people involved. A few facts and all names
have been changed to protect ....
Family lawyer Rick A. Shay met with Penny Wise and her children to do some
planning in the event that Penny needed to go to a nursing home some day. After
much discussion about what could potentially be done, Penny decided that she
would follow one of Mr. Shay’s suggestions and transfer all of her valuable farm
property to a Trust. Because of the Medicaid transfer rules, Mr. Shay told Penny
that she would not be qualified for Medicaid for at least three years because of
the large transfer.
About three and a half years later, Penny had a stroke, resulting in a short
hospital stay and then a move in to a nursing home, which cost about $3,500.00 a
month plus about $500 for prescriptions. Penny’s income was about $1,500.00 a
month, not enough to pay the nursing home and her prescriptions. Penny’s family
met again with Mr. Shay to see about getting Medicaid to help pay for the
nursing home. Mr. Shay helped the family fill out the Medicaid application
showing countable assets of less than $2,000. Rick assured the family that
because the transfer had taken place more than three years earlier, the transfer
to the Trust would not cause Penny to be ineligible for Medicaid. The
application was filed on Penny’s behalf.
Mr. Shay and Mona Lott, Penny’s daughter, went to the Medicaid office and met
with Faye Friendly, the Medicaid caseworker. Faye took the application and asked
several pertinent questions, including information about the Trust. A copy of
the Trust was furnished to Faye, and they informed her of the assets that Penny
had transferred to the Trust. The transferred assets exceeded $400,000.00 in
value.
About 10 days later, Mona Lott received in the mail a denial of Medicaid
eligibility. Mr. Shay was given a copy of the denial. Why was Penny
disqualified? Mr. Shay called Faye to find out, and Faye properly responded, “I
checked with my supervisor who checked with the state office. Because of the
Trust, there was a look back and disqualification for 60 months, not 36 months.
And because of federal law, applying for Medicaid during the 60 months of
ineligibility causes Penny to be ineligible for Medicaid benefits - not just for
60 months, but for 117 months from the date of the transfer!” (In Oklahoma, it
would have been over 200 months of ineligibility.) Mr. Shay called an Elder Law
Attorney who confirmed the caseworker was correct because the law had changed.
Mr. Shay did know of the changes, and his old knowledge created a disaster. A
little knowledge about Medicaid is dangerous.
So the result in this case is that Penny’s family is able to keep the Trust
assets because the lawyer, Mr. Shay, and his malpractice insurance are paying
for Penny’s nursing home care and prescriptions. Attorney Mr. Shay had not kept
up with the changes in the law, and this resulted in obvious detriment.
Medicaid law is evolving and changes frequently. Never rely upon old knowledge.
NOTE: The above scenario also happened where a nursing home helped a
resident apply for Medicaid during the time of disqualification caused by gifts.
We do not yet know the results of the family’s lawsuit against the nursing home.
WORDS OF WISDOM:
He who laughs last should do so
from a safe distance.
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