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Medicaid also is known as Title 19 because it is authorized by TITLE XIX OF THE SOCIAL SECURITY ACT. Title 19/Medicaid has become the primary way the middle class finances long term care.  (This is particularly true for our older parents, who did not have the opportunity to purchase long term care insurance due to age or health.)  The program gives a person a legal right to financial benefits if they qualify.

Life Care Planning, Estate Protection, Disability,
VA & Medicaid Assistance Lawyers

How To Care For a Blind or Disabled Child


Medicaid Planning: How To Care For a Blind or Disabled Child


            John and Mary Bell* live in southern Illinois.  They are now in their mid-70s and have just celebrated their 50th wedding anniversary.

            The Bells have been blessed with three wonderful children.  One is a nurse, one is a school teacher, and their youngest child, Tim,* is unable to work.

            Tim is now in his late 40s and lives in a group home.  He receives Social Security (SSI) of $579 per month and his parents have always provided supplemental assistance.

            Mr. and Mrs. Bell lead a modest life style.  Mr. Bell receives Social Security of about $900 per month and Mrs. Bell gets about $650 per month.  In addition, Mr. Bell has a pension of $350 per month.  They are able to live on this and continue to save about $250 per month.  Like most of their generation, the Bells are excellent savers.

            In fact, they have accumulated a nice little nest egg.  Their assets are as follows:




1999 Ford


Certificates of Deposit


Mr. Bell's IRA


Savings bonds


Money market


Total Assets


Not Counted At this Time


Total Countable Assets



            Unfortunately, Mr. Bell recently had a stroke and will not be able to return home.  He has moved to a nursing home just two miles from the family home.  Mrs. Bell is satisfied with the care he is getting ... but her worst fears are coming to pass.  That's because she is getting to the point where she will soon be unable to care for herself.  Her Parkinson's Disease has progressed to the point where she cannot stay at home alone.  Now that she will soon need to join her husband in the nursing home, who will care for their son, Tim?  Most of all, Mrs. Bell is concerned about the home and money.

            Mrs. Bell frets over the fact that the nursing home will cost about $6,500 a month for both of them...and that does not include the cost of their medications.

            There is good news for the Bells.  Under the Federal and State laws, Tim is considered to be permanently and totally disabled.  Since that is the case, the Bells can give all their assets to Tim ... or to a special type of trust for Tim's benefit ... without incurring any transfer penalties.

            In other words, if the Bells do nothing, with both of them in the nursing home, they will need to pay the cost of their care out of their own funds each month. In addition, they will need to privately pay for medications and the portion of medical care not covered by Medicare. Under this scenario, their $100,000 in liquid assets will last about ten months, and Tim will receive nothing.

            The Bells could give the entire $100,000 to Tim and immediately qualify for benefits to pay for their medical and nursing home care.  However, Tim would loose his SSI and Medicaid benefits until the funds had been spent-down to $2,000.

            Fortunately, the news is much better than that.  Under the "transfer to a blind or disabled child" statute, Mr. and Mrs. Bell can transfer all of their assets to a special type of trust for the benefit of Tim and incur no penalty whatsoever.  Thus, Mrs. Bell and her husband can make a gift of their entire $100,000 and qualify for Medicaid right away.  And if done just right, the transfer will not disqualify Tim from continuing to receive his SSI and Medicaid benefits. The catch is the trust has to be set up just right because the statute, the related rules, and Illinois Medicaid's operating procedures have many "gotchas."

            The Bells feel better knowing that their son, Tim, can be cared for and that they will be able to preserve their life savings for his benefit without jeopardizing his benefits.

            Mrs. Bell consults with an elder law attorney to set up a trust for Tim.  The elder law attorney advises that she and her husband might want to modify their initial plan to be sure that both of them are well-cared-for through out their remaining years - independent of Medicaid.

            Moreover, it is advisable to protect their home and car from estate recovery procedures.  The attorney explains that the home and car are not counted until the death of the last of the two of them to die, at which time the home and car will be subject to estate recovery.  Until then, Medicaid will likely place a lien on the home within four (4) months after Mrs. Bell enters the nursing home.  But with the right strategies, they can protect the home and car from both a lien and estate recovery procedures.

            In addition, the elder law attorney suggests that the Bells use other asset protection strategies which will leave a small inheritance for their two daughters as well as protect the $100,000 for Tim's benefit.

            Richard Habiger is an elder law attorney. You may contact him at 618-549-4529 or on line at


*           All names changed to preserve confidentiality.

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Physical Address
1808 Clark Street, Carterville, Illinois 62918
Phone: 618-985-4529
Toll Free: 800-336-4529

Mailing Address
1808 Clark Street
Carterville, Illinois 62918
Phone: (618) 985-4529