Ohio Transfers to Minors Act
The Ohio Transfers to Minors Act was amended effective 4/6/17 to permit an extension of the age of 21 to 25. However, this must be specified in the governing document (e.g. Will) creating the custodianship for the minor. Many persons felt that age 21 was too young for most persons to be receiving any substantial inheritance from an estate. Age 25 is thought to be a more mature and appropriate age for the maximum limit of a custodianship arrangement. Of course, the other and better option in planning for minors who might receive an inheritance is use of a trust. A trust can specify any age for full distribution out of trust to the beneficiary, funds can be used for the support or education of the beneficiary as determined by the trustee and principal distributions can be staggered over a period of time (e.g. one third at ages, 25, 30 & 35). The trust option is simply more flexible and can be drafted to the desires of the estate owner.
NEW OHIO MEDICAID RULES
There have been many changes to the Ohio Medicaid program that went into effect on August 1, 2016. I have updated the Ohio Medicaid page on this website with all these changes. A short summary of these changes is as follows:
The basic resource limit for an individual is now $2000. It was previously $1500.
A single person can have one exempt car of any value if it is used for transportation. The prior rule limited this exemption to $4500.
There is now an income eligibility limit. The prior income spend down rule for Ohio has been repealed. Income eligibility is determined by comparing the applicant’s countable income to the applicable standard. If income is less than or equal to the applicable standard, then income eligibility is established. If it is over the standard (even one dollar over), the applicant is ineligible. If the applicant does not pass the income test, they can create a special trust called a Qualified Income Trust (aka Miller Trust) which can be used to achieve eligibility.
Many of these changes affect persons who have already been determined to be eligible.
OHIO MEDICAID SSI CONVERSION UPDATE
The State of Ohio has completed its conversion of the Medicaid program to an SSI/1634 State. The new Medicaid regulations have been approved and filed in final form with an effective date of August 1, 2016. At my last seminar presentation for personnel of area nursing homes, we discussed all the proposed new rules. I cannot cover all of that in this brief notice but will try to update this website as soon as possible. Just be aware that for any new applications or continuing eligibility from August 1 forward the rules will be very different.
The new income eligibility rule must be checked for new applicants and, if they do not pass the income test, they will need to set up a Qualified Income Trust (aka Miller Trust) in order to become eligible. However, existing Medicaid recipients who have re-certification appointments between August 1 and December 31 will have this date extended until the same month in 2017. They will be automatically renewed for 2016. However, they will have to prove for all months after August 1, 2016, that they met the spend down requirement in each month under the old rule. By their 2017 renewal date, they will need to have the Miler trust done or lose eligibility. It will obviously be easier to get the trust done as soon as possible to avoid the additional burden of proving income spend down and before some other circumstance arises that might prevent a person from signing the trust.
In conclusion, August 1 was the date for all the Medicaid rule changes so don’t forget this for any new Medicaid applications.
OHIO MEDICAID CONVERSION TO SSI STATE
The Ohio Medicaid program is about to undergo major changes; the most dramatic since its inception in 1972.
The Medicaid program is a joint federal-state program administered by the State. Federal law sets basic standards and requirements for all programs, permitting State elections on a wide variety of financial and non-financial eligibility, benefit and recovery issues. Most States follow Supplemental Security Income (SSI) eligibility criteria to establish Medicaid eligibility. However, Ohio is one of 13 States that initially exercised an option not to use SSI criteria but instead adopted stricter eligibility standards. These stricter standards can be no more restrictive than the standards that were in effect in Ohio on January 1, 1972. Consequently, Ohio is known as a 209(b) State named after the section of the federal law allowing this State option.
However, Ohio will be terminating its 209(b) status and converting to an SSI State. This means that all the eligibility rules will be different along with the Medicaid application process.
MILLER TRUSTS FOR OHIO MEDICAID
The Ohio Medicaid program is about to undergo major changes. Ohio will be terminating its 209(b) status and converting to an SSI State on August 1, 2016. Currently, there is a Medicaid spend down group for persons whose income is over the income limit. This spend down group will be eliminated after the conversion. Medicaid recipients currently in this group will lose eligibility unless they take steps to preserve their eligibility.
The solution provided under the new SSI rules is the creation of a Miller Trust (aka Qualifying Income Trust). The resident’s income is transferred to the trust each month, is then considered non-countable income and the resident will pass the income eligibility test. However, there are some problems for persons who need to do this. The person will either need to be legally competent or have a person appointed under their Power of Attorney to create their trust. If neither of these two situations apply, then they may need to have a guardianship opened up and ask for the Probate Court to approve the creation of this trust.
Of course, this process will require the ability to pay legal fees which many persons will not be able to do. Some possible options for those without funds for legal fees are: 1) local legal aid programs; 2) use of Medicaid exempt resources ( $1500, equity line of credit on residence?, household items?); 3) payment of fees by a relative or friend; 4) the ODM approved vendor which can pay legal fees for creation of the trust. The latter option is a new program from ODM and it is not certain how effective this program will be. The legal fees to create the trust will be a one time fee. A bank account will need to be set up in the trust name but there should not be any significant continuing administrative costs. A guardianship however will be a continuing matter incurring annual legal fees and other costs.
ODM has a special program to continue eligibility for current spend down Medicaid recipients who have a severe and persistent mental illness. This group will continue to be eligible even if their income is too high. Another option for persons who will lose Medicaid eligibility is too look into eligibility for a subsidy for medical insurance on the Exchanges under the Affordable Care Act ( aka Obamacare).
Medicaid recipients currently in the spend down group need to start planning to maintain their eligibility.
2017 Update of Ohio Medicaid Figures
Click Here to see 2017 Medicaid figures on our “Ohio Medicaid” page.
Federal Gift Tax
The annual gift tax exclusion is $14,000 for 2016 & 2017. This amount was originally $10,000 and has been increased for inflation periodically. There is a federal gift tax on any gift in excess of $14,000 per year, per donee. Thus, you can give $14,000 per year to as many persons as you wish and you will owe no gift tax.