The three things to know about income protection for a Medicaid applicant’s spouse

If an applicant for Medicaid is married, the applicant’s spouse is entitled to receive a certain level of monthly income. The Medicaid term for that income allowance is the “monthly maintenance needs allowance” or “MMNA” for short.

Most people need to know just three things about the MMNA.

First, the Medicaid applicant’s spouse must be a “community spouse” in order to receive a MMNA.

Second, the amount of the MMNA approved by the state will be somewhere between the current minimum and maximum allowances. (As of July 1, 2011, those figures will be: minimum, $1,839; maximum, $2,739. To make sure you always have the current figures, bookmark the Medicaid Current Numbers page of our website.)

Each community spouse’s MMNA will be different, and will depend on the community spouse’s shelter costs, including rent, mortgage, homeowner’s insurance, taxes, utilities, and so forth. A homeowner with no mortgage and low property taxes tends to have a MMNA closer to the minimum, while a renter tends to have a MMNA closer to the maximum.

Third, a community spouse can request a MMNA above the maximum cap if the community spouse has “exceptional circumstances resulting in significant financial duress.” (An example is a community spouse residing in an assisted living facility who cannot afford basic necessities with $2,739 a month.) In Pennsylvania, one must request an appeal hearing to obtain a MMNA above the maximum.

So that’s really all most people need to know about the MMNA.

But, okay, suppose you want to know the technical details because you are a lawyer, or you just love arcane minutia. In that case, read on.

The MMNA consists of two parts:

(1) a basic allowance equal to 150% of the federal poverty level for a family of two ($1,839 as of July 1); and

(2) an excess shelter allowance equal to the amount by which shelter expenses exceed the shelter allowance ($552 as of July 1). Shelter expenses are limited to rent or mortgage payments (including principal and interest), taxes and insurance, required maintenance charges for a condominium or cooperative, and an allowance for utility expenses. An applicant should be prepared to substantiate these expenses with bills for the past 12 months. To calculate the excess shelter allowance, add up all the shelter expenses, and subtract the shelter allowance:

(Shelter expenses – shelter allowance) + $1,839 = MMNA

Then make sure your figure does not exceed the maximum cap, currently $2,739. (Pennsylvania also requires the use of utility standards in calculating shelter expenses.)

The statute authorizing a revision of the MMNA above the maximum cap can be found at 42 U.S.C. § 1396r-5(c)(2)(B).

Free webinars on elder rights issues

You can find a number of free, highly informative webinars on elder rights issues at the National Elder Rights Training Project’s website.

Webinars presented this year include:

-Identifying, Preventing, and Addressing Identity Theft

-Basics of VA Benefits

-The Role of Undue Influence in Elder Abuse

The site also has webinars from 2009 and 2010.

The National Elder Rights Training Project is part of the National Legal Resource Center, a collaboration of organizations sponsored by the Administration on Aging.

Time limits for contesting a will or revocable trust

When someone calls my office wanting to contest a will or revocable trust, one of the first questions is whether we still have time to contest it. No use going through all the details of possible forgery or undue influence if we’re two years past the time limit.

Below are the time limits applicable in Pennsylvania.

Will Contest

If someone dies leaving a will, a probate estate may be opened by submitting the will to the register of wills in the county of death. The register opens the estate by issuing “letters of administration.”

Anyone wishing to contest the will usually has one year from the time letters are issued to file an appeal. However, it’s also important to know that the court has authority to limit the appeal time to as short as three months!

Courts have allowed exceptions to the time limit in certain circumstances, including fraud, forgery, and the failure of the will’s executor to notify an interested party about the estate.

(A will may also be contested by filing a “caveat” with the register of wills, but that is done before the will is submitted in the first place by someone who hopes to prevent the register from recognizing the validity of the will.)

Revocable Trust Contest

These days, more and more people use a revocable trust (sometimes called a “living trust”) as a will substitute, mainly to avoid probate. Pennsylvania law now provides a time limit for contesting revocable trusts.

To understand the time limit, you first need to know that Pennsylvania law requires the trustee of a revocable trust to send out notices upon the death of the person who established the trust. Notice must be sent to certain people, such as the deceased’s spouse and children, letting them know some basic information about the trust. The trustee must send that notice within 30 days of learning about the death.

A person wishing to contest the validity of the revocable trust then has “one year after the date on which the trustee gave the notice” to file a petition in court. Keep in mind, though, that the law also allows the court to shorten that time limit to six months.

Act promptly

Whether it’s a will or revocable trust, it’s crucial to take action as soon as possible to preserve the right to contest.

Veterans benefits can provide more income for a Medicaid recipient’s spouse

Those familiar with veterans benefits for aid and attendance often think of them as a means to pay for care at home or in an assisted living facility.

But did you know A&A benefits can provide extra income for the spouse of someone on Medicaid (at least in Pennsylvania)?

Here’s an example. Suppose John, a wartime veteran with a dependent spouse (Mary), has been receiving the maximum benefit for aid and attendance: $1,949 a month. But John has just moved to a nursing home and qualified for Medicaid.

To understand the effect on John and Mary’s income, you need to know that when a veteran with a dependent spouse receives benefits to help with long term care, those benefits have two components:  (1) a low-income pension, and (2) housebound benefits or aid and attendance benefits.  Veterans benefits are not reduced when the recipient has a dependent (such as a spouse) and later qualifies for Medicaid. Under Pennsylvania’s Medicaid regulations, the “aid and attendance and housebound allowance portion of a veterans benefit” does “not count as income” when determining a Medicaid recipient’s income. 55 Pa. Code § 181.81(9).

In John’s case, his veterans benefit of $1,949 a month breaks down into a low-income pension of $1,290, and aid and attendance benefits of $659. He can continue to receive benefits because of Mary, his dependent spouse.

Because the $659 aid and attendance benefit does not count as income, he can give it to Mary each month because it does not count as his income for Medicaid purposes. Mary receives this additional $659 a month in addition to all other income she would be getting.

What’s more, if John and Mary are both low income, some of the pension amount ($1,290) could also go to Mary as part of a monthly maintenance needs allowance permitted under Medicaid provisions. Whatever Mary doesn’t receive from the pension will go to the nursing home to help pay for John’s cost of care.

When your spouse is on Medicaid, an extra $659 a month or more can make quite a difference in your quality of life.

Caregiver secretly becoming spouse & then inheriting — what can you do?

When children are already grieving the death of a parent, what a nightmare to learn that a caregiver has secretly become the parent’s spouse and stands to inherit a large portion of the estate.

A recent Wall Street Journal article explored this problem.

As the article explains, state laws may not provide adequate relief. So what can you do?

I agree with one proactive approach discussed in the article — protect assets ahead of time with an irrevocable trust. Shielding assets from scam artists is just one of the ways a properly drafted irrevocable trust can preserve an estate.

I take issue, though, with the usefulness of the article’s other suggested defense — a durable power of attorney. While I agree that every adult should have a durable POA, the problem is that the person who signed it can easily revoke it. A durable POA wouldn’t pose much of a barrier to a scammer who had the persuasive skills to talk the victim into getting married.