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Long-Term Care Insurance

Paying for Dad's Long-Term Care

You might have to help foot nursing-home bills if your parents aren't eligible for Medicaid.

My dad would like to give me $32,000 worth of stock as a gift. If he goes into a nursing home, will I have to forfeit the stock to pay his nursing-home bills?

You wouldn't specifically have to give up the stock, but you may have to come up with extra money to help pay dad's nursing-home costs if he ends up needing care and can't pay for it himself.

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If your father goes into a nursing home and spends most all of his assets, then Medicaid could end up covering the costs. But if that happens, the gift may make a difference. Under stricter laws enacted in 2006, giving away money within five years of applying for Medicaid can delay an individual's eligibility. Let's say your dad transferred $32,000 and ends up applying for Medicaid within the next five years. And let's assume that the average nursing-home stay in his state costs $6,000 per month. He wouldn't be eligible for Medicaid benefits for the first 5.3 months after applying ($32,000 divided by $6,000).

Because he can apply for Medicaid only after exhausting most of his other assets, you would need to find some other way to pay for that care. The state can't force you to give back the gift, but you might have to find some way to come up with the extra money to pay the bills before Medicaid can kick in. And that might mean using the $32,000 that was gifted to you.

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Medicaid rules and nursing-home costs vary widely from state, and some states are still operating under old eligibility rules that are more liberal, says Harry Margolis, an elder-law attorney in Boston. Check the details with your state's Medicaid agency. You also can find information about your state's Medicaid rules, including the average nursing-home cost to use in the calculation and contact information for elder-law attorneys, in the state-information section ElderLawAnwers.com. For more information about the new Medicaid law, see Medicaid Gets Tough.

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