Healthcare costs can be extremely expensive, especially so when considering the care of an incapacitated person. Depending on the nature of the person’s incapacities, they could require significant amounts of home care or placement in a residential facility offering care and assistance.  An individual’s healthcare can cost many thousands of dollars per month, and Medicaid can be a vehicle by which those costs can be mitigated.   

While an eligible individual can apply for Medicaid with their local department of social services, an incapacitated person may find it difficult to make such an application when they do not have the mental faculties to do so.  Where a person is adjudicated as incapacitated in a New York court of law, an Article 81 guardian can be appointed to make healthcare decisions for the incapacitated person, determine where the incapacitated person should live, and apply for government or private benefits on behalf of the incapacitated person.  But can the guardian apply for Medicaid on behalf of the incapacitated person? 

A guardian can apply for Medicaid on behalf of an incapacitated person, but how a guardian is granted that authority depends on whether a guardianship has already been established.  Where guardianship has not yet been established, the proposed guardian will need to include in their petition to the Court the power to engage in Medicaid planning and apply for Medicaid.  Where a guardian has already been appointed, but the need for Medicaid is now relevant, then the guardian may need to petition the court to expand his or her powers to engage in Medicaid planning and apply for Medicaid. 

Either way, the proposed guardian or the existing guardian must obtain the court’s approval of the Medicaid plan and show, among other things, that the proposed gifts will not adversely affect the living conditions of the incapacitated person and would be consistent with past preferences of the incapacitated person. Where there is no evidence of past preferences, then the guardian must show that a competent reasonable individual in the position of the incapacitated person would be likely to perform similar acts under the circumstances. As a fiduciary, the guardian must act in the best interest of the incapacitated person, and the guardian is held to a standard of care and loyalty that prohibits self-dealing and requires prudent judgment in the management of the guardianship estate.  

Medicaid planning is usually centered around the intentional divesting of a significant portion of the incapacitated person’s assets. Accordingly, Medicaid planning may on its face appear to be a violation of the guardian’s fiduciary duties. This is especially true when the guardian seeks to make gifts of the incapacitated person’s assets to a third party or to the guardian him or herself.  The Medicaid planning of an incapacitated person can be complicated and the steps necessary to make an incapacitated person Medicaid eligible may require an intricate plan.  Therefore, someone petitioning to be appointed guardian of an incapacitated person or an existing guardian should seek the guidance of an Elder Law attorney who has experience in both Medicaid planning and guardianship. 

Looking for more information about Medicaid home care? Be sure to register for our FREE webinar with partner, Deanna M. Eble, on July 21st from 1-1:30 pm. 

During this webinar, “Am I a Candidate for Medicaid Home Care?”, Deanna  will discuss:

• How to Qualify for Medicaid Home Care
• Medicaid Transfer Penalty Rules for Home Care
• How to Protect Your Income via a Pooled Trust

To register, click here.