A recent New Jersey appellate court case yielded bad luck to a grandmother who attempted to loan her daughter funds to pay for her granddaughter’s tuition. Medicaid, the federal program that will pay for long-term care objected to this type of transaction because the regulations classify this type of transfer of funds as a “gift.” The bottom line: if you give funds and need long-term care within five years, the government may assess a penalty for these types of transfers.
For a free legal consultation, call 856-857-6007
The court ultimately rules against the grandmother, who needed skilled nursing care, because they did not receive sufficient evidence that this transfer of funds was a loan that could be repaid by the daughter. Thus, the family was stuck with a penalty period of almost two years. This means that the family could be held responsible for these two years of payment at over $10,000 dollars a month or have to take mom in until the penalty period is served. Medicaid typically assesses a penalty based on the total dollar amount gifted divided by the New Jersey divisor. In this case, the grandmother ultimately caused an enormous burden on her family because she did not first consult with an experienced New Jersey elder law attorney. At Bratton Law, our families can plan ahead for long-term illness and protect those legacy gifts that mean so much.
If you want to protect your hard-earned assets, contact an elder law attorney today at 856-857-6007. We are here to protect you the way we have protected hundreds of families from the high cost of long-term care.