Every once in a while, I make a point to report on an important court decision that has a significant impact on estate and trust planning. In the spring of 2018, the Colorado Supreme Court made such a decision in a case by the name of Sandstead-Corona v. Sandstead (“Sandstead”). The ruling by the Court greatly expanded a probate court’s jurisdiction or control over property that would normally pass outside of probate such as joint tenancy accounts, payable on death accounts and other property or accounts with a specific beneficiary designation. Prior to Sandstead, it was very clear that a joint account, payable on death account, or a beneficiary designation passed outside of probate and the terms of the Will and went directly to the surviving joint tenant or designated beneficiary.
Firm News
One area that causes a lot of confusion with regard to Medicaid is the look-back period.
Douglas had to place his mother in a nursing home. Douglas consulted a social worker who told him that he should spend his mother’s assets down to below $2,000 and then, for a small fee, the social worker would prepare the Medicaid application for his mother and everything would be taken care of.
Douglas spent his mother’s assets below $2,000, paid the social worker $2,500 to prepare the Medicaid application and was told everything was good to go with his mother.
After about four months, Douglas had not heard anything on the status of the Medicaid application and the business office at the nursing home told him that his mother’s account was $35,000 past due. After a few frantic calls to the social worker, Douglas found out that his mother’s Medicaid application was rejected by the Medicaid office because of some prior gifts his mother had made to set up college funds for Douglas’ three children.
Because the Medicaid application was rejected, the nursing home is demanding that Douglas immediately pay the $35,000 past due account or the nursing home will evict his mother. Additionally, the nursing home is telling Douglas that he is personally liable for the payment of the bill because he signed as the “responsible party” at the time his mother was admitted to the nursing home.
Fortunately, we were able to reverse the decision by the Medicaid office on appeal and qualify Douglas’ mother for Medicaid. Douglas would have saved himself a lot of money and stress if he would have consulted with an elder law attorney with expertise in protecting assets from long term care costs this office first and retained them to complete the Medicaid application correctly. I explained that it is almost never in the best interest of the Medicaid applicant to spend down all of their money. There are legal ways to protect a person’s savings if it is done correctly.
The filing of a Medicaid application is a complicated process. There is no room for mistakes.
