1. ELDER LAW: TIPS AND TRAPS KAREN G. JACKSON, ESQ
ELDER LAW: TIPS AND TRAPS KAREN G. JACKSON, ESQ. JACKSON LAW 573 NORTHAMPTON ST. HOLYOKE, MA

2. “WHAT DO I DO WITH MY BARN MONEY?”

3. “WHAT DO I DO WITH MY BARN MONEY?”
COMMUNITY SPOUSE: $120,900 NURSING HOME SPOUSE: $2,000
PLUS NONCOUNTABLE ASSETS:
PRIMARY RESIDENCE IN MASSACHUSETTS
ONE AUTOMOBILE
PREPAID IRREVOCABLE FUNERAL FOR BOTH SPOUSES
$1,500 BURIAL ACCOUNT FOR BOTH SPOUSES
ASSETS NEEDED FOR SUPPORT
I CALL THESE “THE MAGIC NUMBERS”

4. “WE HAVE TO PAY MY HUSBAND’S INCOME TO THE NURSING HOME
“WE HAVE TO PAY MY HUSBAND’S INCOME TO THE NURSING HOME. I CAN’T MAKE IT ON JUST MY INCOME. HELP!”

5. “WE HAVE TO PAY MY HUSBAND’S INCOME TO THE NURSING HOME
“WE HAVE TO PAY MY HUSBAND’S INCOME TO THE NURSING HOME. I CAN’T MAKE IT ON JUST MY INCOME. HELP!”
MINIMUM MONTHLY MAINTENANCE NEEDS ALLOWANCE
$2,002.50
MAXIMUM MONTHLY NEEDS ALLOWANCE
$3,022.50

6. “MY ADVISOR TOLD ME IT WAS OK TO GIVE $14,000 PER YEAR PER BENEFICIARY
“MY ADVISOR TOLD ME IT WAS OK TO GIVE $14,000 PER YEAR PER BENEFICIARY. WHAT DO YOU MEAN THAT MY $14,000 GIFT TO EACH OF MY THREE CHILDREN FOR THE LAST FIVE YEARS MUST BE PAID BACK BY MY CHILDREN? THEY SPENT IT! THEY DON’T HAVE THE MONEY TO PAY ME BACK! THAT IS $211,000!!!”

7. RULE NUMBER TWO: READ RULE NUMBER ONE!
“MY ADVISOR TOLD ME IT WAS OK TO GIVE $14,000 PER YEAR PER BENEFICIARY. WHAT DO YOU MEAN THAT MY $14,000 GIFT TO EACH OF MY THREE CHILDREN FOR THE LAST FIVE YEARS MUST BE PAID BACK BY MY CHILDREN? THEY SPENT IT! THEY DON’T HAVE THE MONEY TO PAY ME BACK! THAT IS $211,000!!!”
TWO RULES:
RULE NUMBER ONE: MAKE NO GIFTS FIVE YEARS BEFORE YOU MIGHT HAVE TO APPLY FOR MASSHEALTH BENEFITS.
RULE NUMBER TWO: READ RULE NUMBER ONE!
NO GIFTS, NOT TO RELIGIOUS INSTITUTIONS, CHARITIES, NOT THE $14,000 PER YEAR PER BENEFICIARY.
EXCEPTION: IF WE CAN SHOW A PATTERN OF GIFTING ESTABLISHED LONG BEFORE THE NURSING HOME SHOWED UP ON THE RADAR SCREEN.

8. “I WISH ‘MR. SMITH’ HAD COME TO YOUR PRESENTATION. HE IS SO DEPRESSED
“I WISH ‘MR. SMITH’ HAD COME TO YOUR PRESENTATION. HE IS SO DEPRESSED. HE HAS BEEN PAYING $12,000 PER MONTH FOR HIS WIFE’S CARE IN THE NURSING HOME SO LONG HE IS IN TOTAL DESPAIR! I TOLD HIM YOU MIGHT HAVE AN IDEA TO HELP HIM.”

9. “I WISH ‘MR. SMITH’ HAD COME TO YOUR PRESENTATION. HE IS SO DEPRESSED
“I WISH ‘MR. SMITH’ HAD COME TO YOUR PRESENTATION. HE IS SO DEPRESSED. HE HAS BEEN PAYING $12,000 PER MONTH FOR HIS WIFE’S CARE IN THE NURSING HOME SO LONG HE IS IN TOTAL DESPAIR! I TOLD HIM YOU MIGHT HAVE AN IDEA TO HELP HIM.”
TOO BAD. “MR. SMITH” NEVER SOUGHT HELP AS FAR AS I KNOW. THE ANSWER FOR MR. SMITH: A MEDIQUAID QUALIFIED ANNUITY.
A SINGLE PREMIUM INCOME ANNUITY (SPIA).
THE PREMIUM IS THE AMOUNT OVER THE “MAGIC NUMBER” , CONVERTING EXCESS ASSETS INTO AN INCOME STREAM TO MR. SMITH . HIS MONTHLY PAYMENTS START 30 DAYS AFTER THE PREMIUM IS PAID AND CONTINUE FOR 60ish MONTHS. THE TERM OF PAYMENTS CANNOT EXCEED MR. SMITH’S “ACTUARIAL DEATH” ACCORDING TO A SPECIFIC TABLE. MR. SMITH WILL HAVE TO PAY INCOME TAXES .
THE SPIA MUST BE IRREVOCABLE, NONASSIGNABLE, AND THE COMMONWEALTH OF MASSACHUSETTS MUST BE NAMED THE PRIMARY BENEFICIARY.
THIS TOOL IS UNDER ATTACK BY CONGRESS, SEEKING TO DIVERT ONE-HALF OF THE INCOME FROM THE COMMUNITY SPOUSE TO THE NURSING HOME RESIDENT, WHICH MUST BE PAID TO NURSING HOME.

10. “HOW CAN I SAVE MY HOME FROM THE NURSING HOME
“HOW CAN I SAVE MY HOME FROM THE NURSING HOME? I WORKED HARD ALL MY LIFE.”

11. “HOW CAN I SAVE MY HOME FROM THE NURSING HOME
“HOW CAN I SAVE MY HOME FROM THE NURSING HOME? I WORKED HARD ALL MY LIFE.”
PURCHASE A LONG-TERM CARE INSURANCE POLICY COVERING NO LESS THAN $125/DAY FOR NO LESS THAN TWO YEARS CARE AT A SKILLED NURSING HOME.
CAREGIVER CHILD EXCEPTION.
LIFE ESTATE DEED OR CONVEYANCE TO AN IIOT.

12. CAREGIVER CHILD EXCEPTION
A CHILD
WHO HAS CONTINUOUSLY RESIDED IN THE PARENT’S HOME FOR AT LEAST TWO YEARS UP TO THE TIME THE PARENT ENTERS A SKILLED NURSING HOME; AND,
WHO PROVIDED CARE TO THE PARENT THAT PERMITTED THE PARENT TO LIVE AT HOME RATHER THAN IN A NURSING FACILITY.
TYPICALLY, NOT DIFFICULT TO PROVE: COPY OF BIRTH CERTIFICATE; VOTER HISTORY SHOWING CONTINUOUS RESIDENCY WITH PARENT; AND, LETTER FROM PHYSICIAN. AFTER PROOF HAS BEEN ACCEPTED BY CASEWORKER, PARENT IS PERMITTED TO CONVEY OWNERSHIP OF HOME TO CAREGIVER CHILD.

13. REVERSE CAREGIVER CHILD EXCEPTION
PARENT MOVES INTO CHILD’S HOME.
REVERSE CAREGIVER CHILD EXCEPTION: PARENT PAYS FAIR MARKET VALUE FOR A SHARE OF THE CHILD’S (AND SPOUSE’S) HOME; DEED FROM CHILD TO PARENT CONVEYING PURCHASED PERCENTAGE OF OWNERSHIP TO PARENT.
FAIR MARKET VALUE DETERMINED BY THE MOST RECENT TAX ASSESSMENT OR BY AN APPRAISAL AT TIME OF PURCHASE.
TWO BENEFITS TO AVOID FIVE-YEAR-LOOK-BACK:  
PARENT PAYS FAIR MARKET VALUE FOR PERCENTAGE OF OWNERSHIP RECEIVED BY CHILD (AND SPOUSE), BECAUSE PAYMENT WAS NOT A GIFT; AND,
CAREGIVER CHILD EXCEPTION.

14. LIFE ESTATE DEED
SOLVES THE PROBLEM OF THE LOSS OF THE HOME THROUGH THE ESTATE RECOVERY PROCESS.
THE GIFT OF THE REMAINDER INTEREST STARTS THE FIVE- YEAR CLOCK FROM THE DATE THE DEED IS SIGNED (IF RECORDED WITHIN A REASONABLE TIME THEREAFTER). THE OWNER OF THE REAL PROPERTY RETAINS A LIFE ESTATE INTEREST.
CAN NAME AN IRREVOCABLE INCOME ONLY TRUST (IIOT) AS A BENEFICIARY AND AVOID THE CAPITAL GAINS TAX ISSUE IF THE HOME IS SOLD BEFORE DEATH.

15. “I AM GOING INTO THE NURSING HOME. WHAT ABOUT MY ADULT DISABLED CHILD

16. “I AM GOING INTO THE NURSING HOME. WHAT ABOUT MY ADULT DISABLED CHILD
EXCESS ASSETS CAN BE TRANSFERRED TO A POOLED TRUST OR SPECIAL NEEDS TRUST FOR A DISABLED INDIVIDUAL UNDER AGE 65.

17. GIFTS MADE TO AN IRREVOCABLE INCOME ONLY TRUST (IIOT)
PERMITTED UNDER FEDERAL LAW, GIFTS MADE TO AN IIOT MORE THAN FIVE YEARS BEFORE THE FILING OF THE MEDICAID APPLICATION ARE NON-COUNTABLE ASSETS.
THERE IS NO ASSET LIMIT, MAKING THIS A POWERFUL MASSHEALTH PLANNING TOOL.
THE RULE: GRANTOR IS PERMITTED TO RECEIVE INCOME FROM THE TRUST ASSETS, BUT IS NOT PERMITTED TO ACCESS PRINCIPAL.
IIOTs ARE UNDER SERIOUS ATTACK IN MASSACHUSETTS USING A WIDE ARRAY OF ARGUMENTS. ROUTINE DENIAL.

18. GIFTS MADE TO AN IRREVOCABLE INCOME ONLY TRUST (IIOT)
NADEAU v. THORN AND DALEY v. SUDDERS ARE PRESENTLY PENDING BEFORE THE SUPREME JUDICIAL COURT. WE HOPE TO HAVE GUIDANCE AND PREDICTABILITY. ORAL ARGUMENTS ON BOTH CASES WERE IN JANUARY, 2017.
“ANY CIRCUMSTANCE TEST”: THE STANDARD FOR DETERMINING WHETHER ASSETS IN AN IIOT ARE COUNTABLE OR NONCOUNTABLE. IF, UNDER ANY POSSIBLE HYPOTHETICAL CIRCUMSTANCE, THE GRANTOR HAS ACCESS TO TRUST PRINCIPAL, THE TRUST ASSETS ARE DEEMED COUNTABLE.
SUMMARY: IIOTs ARE TECHNICALLY STILL VALID, BUT MUST BE CAREFULLY PREPARED BECAUSE OF THE NUMEROUS, MOSTLY FAKE LEGAL ARGUMENTS (e.g. DISREGARD OF TRUST LAW AND THE PROHIBITION OF THE BREACH OF FIDUCIARY DUTIES), ATTACKS BY THE AGENCY.