By: Attorney Rilus Dana from Dana Law Firm
The Arizona Long Term Care System (ALTCS) is part of the Arizona Health Care Cost Containment System (AHCCCS) for Medicaid eligible persons who are elderly (over age 65), physically disabled or developmentally disabled. Under ALTCS, there are a range of benefits available, including home care services, assisted living, and care rendered in an adult foster care home or skilled nursing facility.
While it is true that an applicant must have limited assets, they can still keep their wedding ring and jewelry. The three basic requirements to qualify for ALTCS are that an applicant 1) must be Medically Eligible, meaning they require care or assistance; 2) have Limited Income; and 3) have Limited Resources (wedding ring is safe).
Should I give my house to my kids to qualify for ALTCS?
In 2010, an ALTCS applicant cannot have more than $2000 in countable resources. The key word here is “countable”. ALTCS does not count a primary residence as part of an applicant’s assets if there is less than $500k in equity in it. Since a primary residence is not counted as an asset for ALTCS giving your house to your kids will not help you qualify.
Giving your house or any other asset away or selling them for less than fair market value can actually make it harder to qualify for ALTCS. There is a five year look-back period from the time an applicant applies for ALTCS. If you give your house to your kids and need nursing home care within five years, you will be disqualified for a period of time that is calculated based off the size of the gift. The disqualification period is calculated by taking the fair market value of the gift and dividing it by the average monthly cost of nursing home care in Arizona, which is $5,942.65 in 2010, according to ALTCS. If you have a $150,000 house that you gave to your kids in 2007 and you required nursing home assistance in 2010 and needed to qualify for ALTCS would you be disqualified? Yes, the gift was made inside of the five year look back period and the disqualification period does not start until you apply for ALTCS. In this case you would be disqualified for 26 months (150,000/$5,942.65) from the time of your application in 2010.
As the example shows, be very careful in making any large gifts or selling assets for less than their fair market value. At the Dana Law Firm we can develop a plan to help you qualify for ALTCS while preserving as many assets as possible. There are several strategies approved by ALTCS that can help you preserve many of your assets and still qualify for ALTCS. Call today for a free ALTCS consultation.