What to do if an elder law attorney has made your loved one ineligible for Medicaid?

Pam - I bet you have a couple of different & competing issues going on….

By & large Medicaid allows for the applicant to have a (1) home & a (1) car. There seems to be 3 things you need to do to have these exempt assets fly:
1. They need to do a annual "right of return" letter or statement. My mom's estate attorney did one for her and use that template for it each year. Also her state annual recertification for Medicaid has a form they want signed off on too.
2. Most states have it so that the property needs to be their "homestead" and so there is a homestead exemption filed on the property. This would be indicated in some way from the local tax assessor either in the annual bill they send you or in a postcard they send you and then you go and show that when you pay the bill so you get the homestead exemption. Some places just roll over the homestead automatically other place you have to apply for this every year. My mom still has her home is on Medicaid & in a NH, her county does it automatically, but for my DH, he has to trot down to the courthouse and file it between Jan - April each year for the following year. Also you do need to maintain some degree of a legal presence within the property….like their SS & retirement and other legal documents continue to come to the home, their state ID is still this address, etc.
3. The property needs to have a value of under whatever your state has set as the maximum allowed. For most states this is $ 500K but some have it @ $ 750K. Whether or NOT the property could be sold for this, doesn't matter. It usually is the figure that the tax assessor has on the property. Now most taxes are due end of January and you get the tax bill sometime between Oct and Jan for this. Look to find that bill and see what the value is on the property.

Now it could be that Medicaid is looking at the property as being non-exempt if these things are not there. The property is being viewed as an investment. Investment property is totally an asset and non-exempt for Medicaid. OR if it's a high value property, Medicaid is not dividing the value by 3.

Regarding the whole deed & lein stuff, adding paperwork to a deed is a pretty simple thing to do. A trip to the courthouse and a filing which gets attached to the parcel # and recorded for maybe $ 20.00. Also it totally gets around any ? that mom just gave, "gifted" or transferred the money to you all - all of which would be an issue for Medicaid and IRS. Like what pstegman said.

BUT you can't just do this as simply to a lien. I'm assuming the lein on the property is a mortgage or a loan through a bank…well those types of actions you need to qualify for to get funds which was paid to the homebuilder or whomever owned the property before. You & your hubby applied for the mortgage or loan which is a lein on the property till it's paid off and you get the release of the deed of trust. It would have to be a whole new application to have momma, you & hubby on the lien and with the old mortgage being cancelled and new one put on. Mortgages are lots more stricter now so maybe you all would not qualify to even do it this way & also it is harder to get a mortgage if you are old so mom being on the application would be an issue and declined as she is too old to take on a 20 or 30 year mortgage. The times that mortgages have simple name changes are usually in a divorce when 1 is getting the property and they are awarded it via a court decree by a judge which the mortgage company or bank HAS to accept.

If you look at it these ways, the advise the attorney gave makes sense.

I would ask for the Medicaid office to give you the details as to why she is specifically being decline. Just what is it about the property that is being considered an asset? Now are there any other assets that mom has? Does she have any other property or a life insurance policy with any cash value? By & large Medicaid means you are impoverished with no more than 2K in assets & under whatever your state has set as it's maximum monthly income. For my mom, the state income ceiling $ 2,094.00, she makes $ 1,800 a mo income so she is OK but if she made $ 2,095.00 then she would be ONE DOLLAR over the maximum and declined Medicaid. Each state runs Medicaid under an overall Federal guidelines, so each state can set the exact amount. You need to review to see if this is an issue for your mom. Good luck.

You should consider contacting the Bar Association in your state. And contact another attorney to help you get this straightened out. Were grab bars and other devices that she would need installed in the basement. Was she able to get up and down the stairs?

You put her on the deed to get justification for the renovation expenses from her funds. Otherwise it would have been a gift and therefore a Medicaid penalty and taxable transfer. He gave you good advice for that moment. Your change of plans was not foreseen by him or by you.

Call the attorney and have him explain it to you. If there is a discrepancy, tell him and have him make the correction for your mom. Don't waste your time trying to figure it out or second guess him, he probably has inadequate or inaccurate information. If you disagree following your discussion with him, then have it evaluated by another attorney or call and speak to a Medicaid specialist about it and see if they can offer additional direction.

I still don't get it. She is allowed to own a house. So what if she is on the deed and has part ownership of your house? Does she own another house?

Please understand ... it is not that I don't believe you. This is just confusing to me.

I am very sorry for what you are going through.

No money was lent to us. She paid for renovations to our basement for her living space, so we were advised to add her to the deed by the attorney. He said it was not necessary to add her to the lien, so we believed him. Because he was the expert; that's what we hired him for. We also are aware of the five year rule & there have been no gifts or loans.
We have been through a denial & an appeal. According to our local department of social services, it all comes down to her being on the deed & not the lien. When she was initially denied Medicaid back in the fall, I attempted to contact him, he answered me once & that was it. Her appeal, which I asked for his help with, went on without him. My husband & I attended as a learning experience. It clearly states in black & white that by not being on the lien, her share is counted as a resource. That DMAS document was revised in 2011, & the one time we got a response from him, he still insisted that her being on the lien was not necessary. Thank God I have the response in writing, I will need it for the hardship claim. As for it making no sense, trust me, my whole family is living this nightmare

There must be a reason he put her on the deed, and could not have done that without your approval. Or did mom lend you money for your house? If so, was there legal documentation of the transaction that if not paid back she is entitled to part ownership in the house? All monies given/lent for five years before going on Medicaid will be investigated.

There has to be information that you are not providing. It just does not make sense that a lawyer could do that without reason or documentation to back it up.