My grandmother and I live in Danvers, MA. We are co-owners of a mutual fund account. She purchased it around March of 2005 and thought she had named me as co-owner, but truly named me as beneficiary. We caught the mistake and had my name added as joint owner about 2.5 years ago. She is currently in assisted living but may require nursing care in the future. She tells me to take the money (as my family is in financial need), but my father tells me to leave it because if she were to go into a nursing home under Medicaid, the state would come back for it. If I am co-owner, can I use that money without needing to pay it back should she go on Medicaid?
The down and dirty answer is that no, you should not be spending the money on yourself.
When an applicant applies for Medicaid, the applicant must report any gifts made within the past 5 years. Once the applicant is “otherwise eligible” for MassHealth, MassHealth imposes a disqualification period for the gift. For a single person, this means less than $2,000 of liquid assets.
The disqualification period is calculated by dividing gift by the average monthly nursing home cost, which will equal the amount of time that MassHealth will not pay for the nursing home. For example, if your grandmother had given you $9,000 and the average monthly nursing home cost as determined by MassHealth is $9,000, your grandmother’s disqualification period is one month. As your grandmonther’s back account would now be less than $2,000, she would have no money to pay for her care at the nursing home.
MassHealth will consider a mutual fund account as owned equally by your grandmother and yourself. Since your grandmother put you name on the account, 2.5 years ago she made a gift to you 2.5 years ago of half the value of that account as it was 2.5 years ago. Since the look back period is 5 years, she is only half way through.
The Beliveau Law Group: Massachusetts | Florida | New Hampshire
The attorneys at The Beliveau Law Group provides legal services for estate planning (wills and trusts), Medicaid (planning and applications), probate (estate and trust administration), business law (formation and operation), real estate (residential and commercial), taxation (federal and state), and civil litigation (in connection with these practice areas). The law firm has offices and attorneys in Naples, Florida, Waltham, Massachusetts, and Salem, New Hampshire.