MEDICAID PLANNING - HOW TO CARE FOR A BLIND OR DISABLED CHILD John and Lelani Lee live in Honolulu, Hawaii. They are now in their mid-70s and they just celebrated their 50th anniversary. The Lees have been blessed with three wonderful children. One is a nurse, one is a school teacher, and their youngest child, Tim, is not able to work. Tim is now in his late 40s and lives in a group home. He receives Social Security (SSI) of about $500 a month and his parents have always supplemented his income. Mr. and Mrs. Lee lead a modest life style. Mr. Lee receives Social Security of about $900 per month and Mrs. Lee gets about $650 per month. In addition, he has a pension of $350 per month. They are able to live on this and continue to save about $250 per month. Like most of their generation, the Lees are excellent savers. In fact, they have accumulated a nice little nest egg. Their assets are as follows:
- Residence $160,000
- 1995 Buick $2,500
- Certificates of Deposit $50,000
- Mr. Lee’s IRA $8,000
- Savings bonds $22,000
- Moneymarket $20,000
- Total Countable Assets $100,000
Unfortunately, Mr. Lee recently had a stroke and won’t be able to come home. He moved to the nursing home right up the street. Mrs. Lee is satisfied with the care he is getting… but her worst fears are coming to pass. That’s because she can’t care for herself…her Parkinson’s Disease has progressed to the point where she can’t stay at home either… and now that she has joined her husband in the nursing home, who will care for their son, Tim? And most of all, Mrs. Lee is concerned about the money. Mrs. Lee frets over the fact that the nursing home will cost about $7,500 a month for each of them… and that doesn’t count the cost of the medication. We have good news for the Lees. We explain to them that under the Federal and State laws, Tim is considered to be permanently and totally disabled.  Since that is the case, the Lees can give all their assets to Tim… or to a trust for Tim’s benefit… without incurring any transfer penalties. Fortunately, under the “transfer to a blind or disabled child” section of the Hawaii Medicaid law (MEDQuest) , Mr. and Mrs. Lee can transfer all of their assets to their son with a disability or to a trust for his benefit and incur no penalty whatsoever . Thus, she and her husband can make a gift of the entire $100,000 and qualify for Medicaid right away! The Lees feel better knowing that their son, Tim, will be cared for and they have preserved their life savings. |
