An Arkansas medicaid question.?

You should consult an Arkansas attorney who practices primarily in this area. Your question does touch on federal law, however, so I will let you know what the DRA (Deficit Reduction Act) has to do with this. The elderly couple can do whatever they wish with their property, however, if one or both of them needs nursing home care within the next five years and cannot pay for it, then they are subject to a "look-back" period on anything they transfer for less than fair market value. In the case you are proposing, a transfer might put them in danger of ineligibility if one of them ends up needing nursing home care. For example, if the land is worth $ 10,000.00, and 2 years from now one of them has a stroke and needs nursing home care, then even though the law would allow the spouse at home to keep a certain amount of money (application may vary by state), then that spouse would lose at least $ 10,000.00 of that money (and possibly much more) by having to pay the bill at the nursing home until that amount was paid off. Among the common questions I get in this area: what if I say I'm paying for it, but don't? By "look-back", Medicaid would ask to see the records of the financial transaction in question, including closing documents and bank records. What if we say the fair market value is 1/2 of what it actually is? Generally, the fair market value is going to be what the tax assessor's office says it is, however, check with your local lawyer or Medicaid office to confirm, they may have different rules governing the fair market value. The transfer penalty will go into effect for each dollar under that actual value that is not given to the elderly couple. The same is true of vehicles or other items with ascertainable value. I would want my client in Alabama in this situation to ensure they are complying with the local Medicaid office's rules regarding the transaction and paying what the land is worth. In the alternative, ensure you can pay for that equivalent value in nursing home care, which may be more. In the $ 10,000.00 example I gave you, under the DRA, the "penalty" make work its way off at - say - $ 4,000.00 per month, when the actual monthly cost of the nursing home could be as high as $ 5,800.00. So, theoretically, this $ 10,000.00 savings to the family member could result in a loss of more than $ 15,000.00 to the senior who would have to pay the nursing home for those months of ineligibility.

There are some notable exceptions to the transfer rules which might help you and your family in this situation. Please consult with an attorney who practices in this area for those exceptions and how they might apply to you. Remember, state law will vary greatly from state to state and I CANNOT give you any advice about what Arkansas says so I have no idea.

I hope this helps.

Kyla Kelim