Recently a fellow attorney told me about how he was working with a married couple to attempt to stretch their dollars to get past the 5 year look-back on a transfer of property with a retained life estate. He said they would be eligible to apply for Medicaid in 2.5 years.
The husband is a Veteran, still lives at home, and meets the service eligibility requirements for the “Aid & Attendance” (A&A) benefit. His wife is in a nursing home and their income is far from covering her medical expenses when factoring in her nursing home costs. As such, the attorney was hoping to use the VA Benefits for the husband to offset their expenses until they become eligible for Medicaid in 2.5 years.
He asked how the VA would treat the life estate interest and whether it would count against them as an asset even though it is not marketable.
He said: “I remember being told that the veteran, while alive, should really be the spouse that needs to be certified as homebound or in need of A&A. Is that correct? Will the couple be limited to the level of pension appropriate to his level of care even though the wife is clearly the one in need of A&A and would qualify on her own if she was a widow?”
These are great questions. First, if the real estate in question is their home place, the life estate is not a factor; but if it isn’t their residence, the entire value of the property will be counted toward their net worth for VA purposes.
And unfortunately, the most the healthy veteran will get is the Low Income Pension of $1,360 per month (which is different from, and less than, A&A). The VA considers both spouses’ income and medical expenses, to include the nursing home, in determining eligibility.
The attorney replied: “So the veteran (if healthy) receives only up to 50% of what he would otherwise receive if the sick spouse is his non-veteran wife?”
Yes. Either a veteran applies for the benefit or the surviving spouse applies. Since the veteran is alive, he applies. As he is healthy, he is not eligible for aid and attendance and if he is still driving, he won’t qualify for housebound, so that only leaves the low income pension as an option.
If you have questions about VA pension benefits, please schedule a complimentary consultation (remember, always free for our valued clients) so we may evaluate your situation and advise you of your entitlements.
Jerry Shiles
Author, Attorney
Parman & Easterday
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