When is it too late to protect assets when qualifying for Medicaid?

asset-protectQuick answer: when all (or almost all) of your assets are spent down and you’re qualified for Medicaid benefits.

Until that time, there are usually opportunities for some savings.

Most people are aware that Medicaid provides benefits for long term stays in skilled nursing, and that the Medicaid rules require applicants to spend down assets to a certain level before qualifying for benefits. Many are also aware that an applicant can keep some assets, like a house and a car, and still get benefits.

Fewer people know that some assets can be transferred away without incurring any type of penalty. These “exempt transfers” (you can read more about them here) include transfers such as establishing a special needs trust for the benefit of a disabled son or daughter, or deeding a house to a caregiver child.

Another way to protect assets is to transfer them to the spouse of the applicant (in Medicaid parlance, called a “community spouse”). Medicaid law contains a number of provisions allowing the community spouse to keep assets, but people often need the advice of an experienced elder law attorney to know how to take advantage of those opportunities.

In addition, an applicant may also have the opportunity to purchase exempt assets. That is, an applicant may be able to use funds that would otherwise be spent down and use them to benefit the applicant or someone else in the family.

In short, you may have many opportunities to protect assets, even when someone has already entered a nursing home. We can help you to devise a plan tailored to getting the best result possible in your situation.

Support the Special Needs Trust Fairness Act


A special needs trust holds assets (usually funds) for the benefit of a disabled person without affecting any public benefits the person may receive, such as SSI or Medicaid. Those assets can then be used for the disabled person’s benefit.

Current law allows a disabled person to create a special needs trust, with his or her own funds (a “self settled” trust). However, the law restricts those who can establish such a trust to a “parent, grandparent, legal guardian of the individual, or a court.” (See 42 U.S.C. 1396p(d)(4)(a).) 

Oddly, the disabled person has no power to establish a self settled special needs trust. As a result, a disabled person — even one with full mental capacity — must petition a court to create such a trust when there is no parent, grandparent, or legal guardian.

The Special Needs Trust Fairness Act introduced into this session of the U.S. Congress (H.R. 670) would remedy that gap in the law by allowing a disabled person to establish a self settled special needs trust on the person’s own behalf.

The bill enjoys bipartisan support. A version of this bill in the last Congress passed out of the Senate Finance Committee but failed to become law.

We at Sykes Elder Law support the Special Needs Trust Fairness Act. Current law burdens disabled persons unnecessarily by requiring them to file court petitions to establish their own trusts, simply because they have no parent, grandparent, or legal guardian to do that for them. This distinction is unfair, benefits no one, and causes unnecessary work for the court system.

We urge all those who care about the disabled in our country to support the bill and to make your support known to your senators and representatives in Congress.

What is a geriatric care manager?


As our population ages, there are new services available to help families cope and make prudent decisions about an aging loved one. Caring for a senior can rapidly become complex and overwhelming. Having one person manage multiple concerns and issues can stretch health care dollars by reducing duplicative services. A geriatric care manager (GCM) can be a great resource.

The GCM coordinates care for seniors or disabled adults. They have a variety of educational backgrounds which may include social work or gerontology. They evaluate and coordinate care to assist seniors to maximize their independence while maintaining a safe environment.

Geriatric care managers can develop a comprehensive plan to make decisions about:

  • housing
  • home care services
  • medical management
  • communicating the changing needs of the senior
  • social activities
  • legal services

GCM’s can help coordinate and address:

  • bill paying
  • transportation to doctor appointments
  • home safety needs
  • compliance with medication regimens

GCM’s are invaluable when a senior has limited or no family support in the context of complicated medical conditions. These days the adult children frequently live in other cities and cannot provide the hands on support and decision making that is necessary to keep a parent safe. Sometimes family members have bitter disputes about crucial decisions that are never made until a crisis occurs.

Consider a GCM if you would like the peace of mind that can result when you know your parent has an objective and knowledgeable person whom they trust. Contact our office if you would like a referral, or to discuss any elder law issues.


Questions asked & answered at last night’s “Estate Planning Essentials” Workshop


  1. Can my estate plan help my heirs pay less taxes?
  2. What is probate and should I avoid it?
  3. Are Pennsylvania’s estate planning documents legal in other states?
  4. Do you need to have a lot of money to make a trust worthwhile?
  5. How can I protect assets from potential long term care needs?
  6. How does Sykes Elder Law differ from wealth managers?
  7. Should I buy insurance for business succession planning?

Join us at our next workshop and have your questions answered. Click here for upcoming dates!

PA same-sex marriage decision means inheritance tax savings

PA Governor Tom Corbett

PA Governor Tom Corbett

Same-sex marriage has come to Pennsylvania due to this week’s court ruling and Governor Corbett’s decision not to appeal the ruling.

This new development has wide-spread implications for estate planning and elder law, affecting such things as who can make health-care decisions for an incapacitated person, how much money a same-sex spouse can protect when applying for Medicaid, who will inherit from the estate of someone who died without a will, and many other issues.

In this post, let me take feature just one issue: Pennsylvania inheritance tax. Imagine two women named Pamela and Julia are a couple in a committed relationship. Julia has a taxable estate worth $500,000. Before the ruling, if Julia were to die and leave her entire estate to Pamela, her “friend” for tax purposes, Pennsylvania would have imposed a 15% inheritance tax. After the ruling, if the couple marry and Julia leaves her estate to her “spouse,” the tax rate is 0%.

Inheritance tax savings by being allowed to marry: $75,000.

In addition to all the intangible benefits that accompany the institution of marriage, same-sex couples can now enjoy a number of practical, money-saving advantages available to married couples in Pennsylvania.