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Medicaid Eligibility Choices May Require Expert Advice

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MARCH 10, 2003 VOLUME 10, NUMBER 36

Last week Elder Law Issues described Florida resident Josephine Green’s efforts to qualify her sister Stella Thompson for Medicaid assistance with nursing home costs. Having Ms. Thompson buy an interest in Ms. Green’s condominium was not a successful strategy. Ms. Thompson, you might recall, had about $20,000 too much cash to qualify. What might she have done to accelerate her Medicaid eligibility?

Spend down. The easiest choice for Ms. Thompson and Ms. Green to select would have been to simply spend Ms. Thompson’s $20,000 and then apply for Medicaid. Of course she could have spent the money on the nursing care itself and been covered by Medicaid when her resources dropped to $2,000, but she could also have spent her money on other things.

In addition to nursing care Ms. Thompson might have spent her $20,000 on equipment (for example, a customized wheelchair or a special mattress if either would improve her quality of life). She could also have prepaid her burial and funeral expenses (though the precise method for doing this may be complicated and varies by state). She could have purchased furniture, a television set for her room, or other personal items.

Ms. Thompson could even have paid a law firm to advise her on Medicaid eligibility and make the application for her—saving her sister the trouble and expense of completing the application itself. The key point: “spend down” is not limited to nursing home expenses, but can include other items that benefit the patient.

Gifts. Ms. Thompson could simply have given most of her $20,000 to her sister or other relatives. If, for example, she had given away $15,000, she would have been ineligible for Medicaid assistance for only 3 months—and she would have had the remaining $5,000 (plus her Social Security income) to make the nursing home payments for those three months. By balancing her nursing home costs, her income and the Medicaid disqualification period, she could have calculated the amount to give.

Of course this assumes that Ms. Thompson was competent to make a gift to her sister—or to anyone else. If, like many nursing home residents, she was unable to make a decision to give away some or all of her assets, it might have been too late to adopt this strategy. The court opinion described in last week’s Elder Law Issues indicated that she had given her sister, Ms. Green, a power of attorney; a properly written power of attorney might permit the agent to make gifts on behalf of Ms. Thompson (though that authority would need to be specifically spelled out). Arizona has an additional requirement before Ms. Green could make gifts on Ms. Thompson’s behalf—the paragraph giving authority to make gifts would have to be separately initialed by Ms. Thompson and the witnesses to the signing of the power of attorney.

Personal services contract. Ms. Thompson could have signed an agreement with her sister or another family member for them to provide care and assistance for the rest of her life, and prepaid them for those services. While the precise terms of such an agreement would need to be spelled out, and the validity of the contract established to the satisfaction of the Medicaid agency, such a course would have permitted her to legitimately transfer money to her family in return for services.

Ms. Thompson and her sister had other options to consider—and in fact may have also implemented some of them at the same time. At Fleming & Curti, PLC, we counsel patients and family members facing similar problems in Arizona. Navigating the Medicaid eligibility process is often difficult and time consuming, and qualified, expert help can make the process more understandable and easier to cope with.

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Robert B. Fleming


Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman


Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson


Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

Famous people's wills

Matthew M. Mansour


Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.