Scenario: Ann and George receive Social Security income for their daughter, Michelle, who is developmentally disabled. George was diagnosed with dementia two years ago and his condition deteriorated rapidly over the last six months. Ann is faced with placing George in a skilled nursing facility, but is concerned that the cost will drain their savings leaving no money to care for Michelle. If they apply for ALTCS benefits, they will be told to spend down, which again will drain the funds they have to care for Michelle. How can Ann obtain the care George needs and have the funds to continue caring for Michelle?
Response: Through a Special Needs Trust, money can be set aside to care for a disabled child while still allowing a parent to qualify for Medicaid benefits. However, it is important to make sure that the trust complies with ALTCS rules. ALTCS will review all trusts to confirm that assets were not transferred contrary to guidelines. If the trust is not properly set up, the assets in the trust may be considered countable resources. Failure to report assets is considered Medicaid fraud and, when discovered, will result in ineligibility of benefits as well as other penalties. The importance of setting up the trust properly cannot be emphasized enough. By establishing a Special Needs Trust, Ann will be able to receive financial assistance to pay for George’s long-term care and still be able to care for her daughter.
(Note: This is informational only and should not be considered legal advice. Please consult a knowledgeable Elder Law attorney regarding your specific legal needs.)