Have you ever been accused of taking money from a parent/parents bank account while they are on Medicaid? Have you ever been accused of putting the money into your own personal bank account? I hope after reading this story that you will have a better understanding on how to resolve the issue.
For so many years there was a man who payed caregivers cash to help care for his wife. He never had any receipts to prove what he was doing. That is how he took care of his wife for so long. His brother is a doctor and helped him out. They went as far as getting a power of attorney so, it was legal. The brother and sister of the husband decided to take the whole life savings account and put it into their name. They used that money to help pay for their brothers bills. They were still continuing to use the cash to pay for the caregivers to take care of their sister-in-law. They then borrowed $60,000 from their brother. They moved all the money that was in a brokerage account into a checking account. They combined their brothers money with their own personal money. They were not keeping receipts on what was used from that money to go help their sister-in-law. When DHS saw the bank records, they thought the money was just taken out of the account. They thought it was not going to the care of their sister-in-law. After while it was getting to be to much on their brother to be having his wife at home. They decided to move her into a assisted living facility. The brother and sister eventually got behind on keeping track of their bank records. It was then that DHS decided to turn the case over to APS. DHS was accusing the brother and sister of financial exploitation –The Oklahoma Statutes Title 21 Section 843.4 states that “exploitation of an elderly person (anyone over the age of 62) or disabled adult” means: 2.)”Obtaining or using, endeavoring to obtain or use, or conspiring with another to obtain or use an elderly person’s or disabled adult’s funds, assets, or property with the intent to temporarily or permanently deprive the elderly person or disabled adult of the use, benefit, or possession of the funds, assets, or property, or to benefit someone other than the elderly person or disabled adult, by a person who knows or reasonably should know that the elderly person or disabled adult lacks the capacity to consent.” Section B-1 “If the funds, assets, or property involved in the exploitation of the elderly person or disabled adult are valued at One Hundred Thousand Dollars ($100,000.00) or more, the violator commits a felony punishable by imprisonment in the custody of the Department of Corrections for a term not more than fifteen (15) years and by a fine in an amount not exceeding Ten Thousand Dollars ($10,000.00). Section B-2 “If the funds, assets, or property involved in the exploitation of the elderly person or disabled adult are valued at One Hundred Thousand Dollars ($100,000.00), the violator commits a felony punishable by imprisonment in the custody of the Department of Corrections for a term not more than ten (10) years and by a fine in an amount not exceeding Ten Thousand Dollars ($10,000.00). APS might use his statement against him, even though he did nothing wrong.
As you can see this type of issue can become a big mess. The Oklahoma Statue states:
OAC 317:35-19-20. Determining financial eligibility of categorically needy individuals.
(6) Transfer of assets on or after February 8, 2006. An institutionalized individual, an institutionalized individual’s spouse, the guardian or legal representative of the individual or individual’s spouse who disposes of assets on or after February 8, 2006 for less than fair market value on or after the look-back date specified in (A) of this paragraph subjects the individual to a penalty period for the disposal of such assets.
(A) For an institutionalized individual, the look-back date is 60 months before the first day the individual is both institutionalized and has applied for medical assistance. However, individuals that have purchased an Oklahoma Long-Term Care Partnership Program approved policy may be completely or partially exempted from this Section depending on the monetary extent of the insurance benefits paid.
(B) For purposes of this paragraph, an “institutionalized” individual is one who is residing in an NF.
(C) The penalty period will begin with the later of:
(i) the first day of a month during which assets have been transferred for less than fair market value; or
(ii) the date on which the individual is:
(I) eligible for medical assistance; and
(II) receiving institutional level of care services that, were it not for the imposition of the penalty period, would be covered by SoonerCare.
(D) The penalty period:
(i) cannot begin until the expiration of any existing period of ineligibility;
(ii) will not be interrupted or temporarily suspended once it is imposed;
(iii) When there have been multiple transfers, all transferred assets are added together to determine the penalty.
(E) The penalty period consists of a period of ineligibility determined by dividing the total uncompensated value of the asset by the average cost to a private patient in a nursing facility in Oklahoma shown on OKDHS Appendix C-1. In this calculation, the penalty must include a partial month disqualification based upon the relationship between that fractional amount and the average cost to a private patient in a nursing facility in Oklahoma. There is no limit to the length of the penalty period for these transfers. Uncompensated value is defined as the difference between the fair market value at the time of transfer less encumbrances and the amount received for the resource.
(F) Assets are defined as all income and resources of the individual and the individual’s spouse, including any income or resources which the individual or such individual’s spouse is entitled to but does not receive because of action:
(i) by the individual or such individual’s spouse;
(ii) by a person, including a court or administrative body, with legal authority to act in place of or on behalf of the individual or such individual’s spouse; or
(iii) by any person, including any court or administrative body acting at the direction or upon the request of the individual or such individual’s spouse.
(G) Special Situations.
(i) Separate Maintenance or Divorce.
(I) There shall be presumed to be a transfer of assets if an applicant or member receives less than half of the couple’s resources pursuant to a Decree of Separate Maintenance or a Decree of Divorce.
(II) There shall be presumed to be a transfer of assets if the income is reduced to an amount lower than the individual’s own income plus half of the joint income. The transfer penalty shall be calculated monthly.
(III) Assets which were exempt lose the exempt character when not retained by the applicant or member in the divorce or separate maintenance. These assets, if received by the other spouse, are counted when determining the penalty.
(IV) The applicant or member may rebut the presumption of transfer by showing compelling evidence that the uneven division of income or resources was the result of factors unrelated to SoonerCare eligibility.
(ii) Inheritance from a spouse.
(I) Oklahoma law provides that a surviving spouse is entitled to a minimum portion of a deceased spouse’s probate estate. The amount depends on several factors.
(II) It is considered a transfer if the deceased spouse’s will places all, or some, of the statutory share the applicant or member is entitled to receive in a trust which the applicant or member does not have unfettered access to or leaves less than the statutory amount to the applicant or member, who does not then elect to receive the statutory share in probate proceedings.
(H) A penalty would not apply if:
(i) the title to the individual’s home was transferred to:
(I) the spouse;
(II) the individual’s child under age 21 or who is blind or totally disabled as determined by Social Security;
(III) a sibling who has equity interest in the home and resided in the home for at least one year immediately prior to the institutionalization of the individual; or
(IV) the individual’s son or daughter who resided in the home and provided care for at least two years immediately prior to the individual’s institutionalization.
(ii) the individual can show satisfactorily that the intent was to dispose of assets at fair market value or that the transfer was exclusively for a purpose other than eligibility. It is presumed that any transfer of assets made for less than fair market value was made in order to qualify the individual for SoonerCare. In order to rebut this presumption, the individual must present compelling evidence that a transfer was made for reasons other than to qualify for SoonerCare. It is not sufficient for an individual to claim that assets were transferred solely for the purposes of allowing another to have them with ostensibly no thought of SoonerCare if the individual qualifies for SoonerCare as a result of the transfer.
(iii) the transfer was to the community spouse or to another person for the sole benefit of the community spouse in an amount equal to the community spouse’s asset allowance. “Sole benefit” means that the amount transferred will be used for the benefit of the community spouse during his or her expected life.
(iv) the asset was transferred to the individual’s child who is blind or totally disabled as determined by Social Security. The transfer may be to a trust established for the benefit of the individual’s child.
(v) the asset was transferred to or from the spouse (either community or institutionalized) or to another person for the sole benefit of the spouse if the assets are not subsequently transferred to still another person for less than fair market value. “Sole benefit” means that the amount transferred will be used for the benefit of the spouse (either community or institutionalized) during his or her expected life.
(vi) the asset is transferred to a trust established solely for the benefit of a disabled individual under the age of 65.
(vii) the denial would result in undue hardship. Undue hardship exists when application of a transfer of assets penalty would deprive the individual of medical care such that the individual’s health or life would be endangered; or of food, clothing, shelter, or other necessities of life.
(I) An undue hardship does not exist if the individual willingly transferred assets for the purpose of qualifying for SoonerCare services through the use of the undue hardship exemption.
(II) Such determination should be referred to OKDHS State Office for a decision.
(III) If the undue hardship exists because the applicant was exploited, legal action must be pursued to return the transferred assets to the applicant before a hardship waiver will be granted. Pursuing legal action means an APS referral has been made to the district attorney’s office or a lawsuit has been filed and is being pursued against the perpetrator.
(I) The individual is advised by a written notice of a period of ineligibility due to transfer of assets, a timely process for determining whether an undue hardship waiver will be granted and a process for an adverse determination appeal. The notice explains the period of ineligibility for payment of NF and the continuance of eligibility for other SoonerCare services.
(J) The penalty period can be ended by either all assets being restored or commensurate return being made to the individual.
(K) Once the restoration or commensurate return is made, eligibility is redetermined considering the value of the restored asset or the amount of commensurate return.
(L) The restoration or commensurate return will not entitle the member to benefits for the period of time that the asset remained transferred. An applicant cannot be certified for nursing care services for a period of asset ineligibility.
(M) Assets which are held by an individual with another person or persons, whether held in joint tenancy or tenancy in common or similar arrangement, and the individual’s ownership or control of the asset is reduced or eliminated is considered a transfer. The exception to this rule is if ownership of a joint account is divided according to the amount contributed by each owner.
(i) Documentation must be provided to show each co-owner’s contribution;
(ii) The funds contributed by the applicant or SoonerCare member end up in an account owned solely by the applicant or member.
(N) When a transfer of assets by the spouse of an individual results in a period of ineligibility and the spouse who made such transfer subsequently becomes institutionalized, the period of ineligibility will be apportioned between the two institutionalized spouses.
(7) Commensurate return. Commensurate return for purposes of this Section is defined as actual money payment or documentation of money spent on the member’s behalf; i.e., property taxes, medical debts, nursing care expenses, etc., corresponding to the market value of the transferred property. The definition does not include personal services, labor or provision of rent-free shelter. It also does not include a monetary value assigned and projected for future payment either by cash or provision of services. Any transfer of property within the five years prior to application or during receipt of assistance must be analyzed in regard to commensurate return as well as determination of intent.
This statue is saying that if the spouse, child, legal guardian etc. can show proof of
what they are spending the money on, there won’t be any charges filed.
The best way to get advice for Medicaid is to talk to a lawyer who is an expert in
Medicaid planning for long term nursing home care. A good attorney will recommend an arms length approach. Just like you would do if you were acting for a stranger, keep their money separate from your own money. Do not put the money into your name or transfer resources into your name. APS will not believe you when you tell them that you hired caregivers and paid them with cash. You will find that the caregivers will not remember that they worked for cash if you try and get statements from them. The reason for that is because you have no proof if you did not keep receipts. When you hire someone and pay them cash, you had better have them sign a receipt. And, you are breaking the
government tax rules and regulations by violating the payroll tax laws and workers compensation insurance laws. Brent D. Coldiron, is an expert in probate, living trusts, elder law, Medicaid planning for long term nursing care and guardianship. You may reach him at his website
BRENT’S WEBSITE or by telephone at (405) 478-5655.