This writer often has the privilege of advising families of elders in or anticipating nursing home care. These families often suffer from a few misconceptions.

First, upon admission to a nursing home, the State or the facility do not simply take all of the resident's assets. Rather, the resident is expected to pay for care until assets are exhausted, with some exceptions, before Medicaid pays for care.

Second, children are not responsible for the cost of care, under most scenarios. This result could differ if (a) the child voluntarily agreed to be liable for the parent's cost of care, or (b) the child were the recipient of significant parental assets prior to admission.

In the former case, the child must know that he or she is agreeing to personal liability for the cost of care, and in general must sign a separate document to that effect. The latter case has not arisen yet, but this writer anticipates that the states, strapped for funds, will proceed against recipients of funds in such a situation.

The Maryland Code provides, in section 13-102 of the Family Law Article, that an adult child cannot refuse to provide a destitute parent with "food, shelter, care and clothing." This provision can be enforced by the State’s Attorney in Court. The provision of "food, shelter, care and clothing" can occur in a nursing home. Certainly it would not be unethical to require that the child support the parent, at least to the extent of assets received by that child from the parent.

The "look-back" period on the Medicaid application for gifts from a Medicaid applicant is now sixty months prior to the date of application, and the period of disqualification now runs from the date of Medicaid qualification (but for the gift). Any gift over $1,000 within that 60-month period will produce a period of disqualification equal to the amount of the gift divided by the imputed monthly cost of care, $6,300, rounded up.

That means that if a senior had given her grandchild $20,000 to help with college tuition one year ago, became ill shortly thereafter and spent down her available resources on the cost of care, she would be disqualified for Medicaid for a period of four months ($20,000 divided by the $6,300 monthly cost of care, rounded up). Further, this period of disqualification from Medicaid payment would start to run from the date of transfer.

Because the date of qualification is not necessarily the date of application, it can be difficult to plan a transfer that will not create a disqualification. Again, due to this uncertainty, it can be difficult to assure anyone that a gift will not create a period of disqualification.

One answer is for the couple to purchase long-term care insurance to cover at least the period of disqualification; another is for them to retain enough to privately pay for care for the duration of the look-back period, currently 60 months (but subject to change). Thus, no application would ever be made in a period during which the transfer will be discovered.

However, future changes to the law extending the look-back period might not grandfather prior transfers. It becomes difficult, then, to plan with any assurance.

The public policy of this country is becoming more and more explicit. For all but the very poor, the purchase of lifetime long-term care insurance is all but mandatory. Congress has made it clear that long-term care funding is more important than a comfortable retirement or even any retirement at all.