SPOUSAL POST ELIGIBILITY TRANSFERS

Here's how this works. In NY, a spouse who lives at home (sometimes called a "community spouse") and has a spouse in a Nursing Home (NH), may keep (1) a certain amount of liquid assets, (2) a home, (3) a burial fund, and (4) certain personal property not important to this discussion. The community spouse may have more assets (called "resources" in Medicaid parlance) than permitted but would be wise to sign what is called a "spousal refusal letter." All that means is that the community spouse is not willing to use his or her income and assets to support the spouse in the NH. So far so good. But the story does not end there because in NYC and elsewhere, the Department of Social Services may sue the community spouse for support under the Family Court Act or in the Supreme Court under the Social Services Law. Community spouses do not want to be sued- especially at a time when they are under a great deal of stress as a caregiver.

In order to make the community spouse a much less attractive candidate for a law suit, the community spousal might be well advised to transfer her assets to children or a trust. It is now clear that such a transfer will not have an adverse effect on the NH spouse's continued right to Medicaid. Thus the transfer of assets at that time affects only the community spouse who may not need Medicaid ever or for a long period of time.