Keep Your Records! (You Never Know)

A few years ago I wrote an article about the need to keep at least five years’ worth of financial records, in case you or your spouse need to go into a nursing home. Since that time, I have had more than a few clients who have run into problems retrieving these records from their banks or other financial institutions when they make a Medicaid application. This refresher hopefully will drive home the importance of what I am talking about.

No one knows whether they or their spouse will need nursing home care. Considering that the cost of such care is expensive – approximately $500 per day locally, $182,500 per year – virtually everyone will try to do what they can to become eligible for Medicaid, which will pay most or all of that cost if you become eligible.

The basics:

When an application is made for Medicaid coverage for care in a nursing home, five years’ of financial records, including a spouse’s records, must be provided to the Department of Social Services (“DSS”). If something is missing – and it almost always is – DSS sends a letter stating what is needed, and allows ten days for it to be provided.

Often, the missing documentation can not be provided within ten days. A request is made for more time and, if the applicant shows that all reasonable efforts are being made to comply, DSS likely will allow another ten days. Beyond that, additional time is not likely. What is then likely is a letter from DSS denying Medicaid coverage for failure to provide the requested documentation.

Although there are ways to fight the denial, that process gets more expensive. Coverage might also be delayed, meaning that months of the nursing home bill might have to be paid privately.

Some examples:

1. A woman who is applying for nursing home Medicaid is a widow. Her husband died two years before. After he died, she discarded financial records of all accounts he owned by himself, thinking they would not be needed. They are needed. She is required to use all reasonable efforts to obtain those records, potentially including applying to the Surrogate’s Court to become the legal representative of his estate, even though there otherwise would have been no reason to do so.
2. A man who is applying for nursing home Medicaid transferred his IRA account three years ago from one administrator to another. Although he has his records from the prior administrator up until the time he changed to the second, he never actually closed out the account. The last statement he has from the prior administrator shows a two cents balance after the transfer. That account never was closed. He must close that account and obtain all records from that account until closing.
3. A woman who is applying for nursing home Medicaid thought she provided all records needed, and was surprised when we asked her where a $20,000 deposit into her account four years before came from. At first, she had no idea. After she contacted the bank into which the money was deposited, and they did some research, she learned that the money was from a certificate of deposit that she had at another bank. Of course, she had to obtain those records.
4. A man who is applying for nursing home Medicaid sold his house three years before. He figured that by now he no longer needed those records. Wrong. He needs them. He needs to show the deed transferring the property and proof of how much money he received for the sale. He also needs to show where that money went.

The lesson:

Keep meticulous, legible records of all accounts and property owned during the last five years, in neat chronological order. This includes accounts that have been closed. No staples. Keep records of transfers. If you received an inheritance, or a gift, or sold your car or boat, keep copies of those records, and the checks before you deposit them, or at least a written record proving the source of deposits. If your bank does not include copies of your canceled checks with your statements, I suggest changing banks to one that does.

Too often, we see deposits into accounts and no one remembers where they came from. If the Medicaid application is being made by someone who had no involvement with the record-keeping, and has no authority to deal with the bank or other financial institution, the result could be a denial. That is poor planning. By the way, Florida banks are notorious for losing records!

Make sure a trusted person or two at least has authority to obtain copies of financial records. A better recommendation is that your trusted person be authorized to sign on accounts, and that you sign a comprehensive Power of Attorney authorizing that person to act on your behalf.

Since good record-keeping is required for income tax purposes anyway, the additional organization discussed here should not be a great burden. If the time comes for a Medicaid application, your loved ones will thank you for the concern you showed by making it easy for them to figure things out.

Copyright 2019 Joseph A. Bollhofer, Esq.
Editor’s Note: Joseph A. Bollhofer, Esq., practices law in the areas of elder law, Medicaid, estate and business planning and administration, and real estate. He is a member of the Elder Law, Real Property, and Surrogate’s Court Committees of the Suffolk County Bar Association and of the Elder Law and Real Property Law Sections of the New York State Bar Association. He has been serving area residents since 1985 and is admitted to practice law in New York and New Jersey. His office is located at 291 Lake Ave., St. James, NY. (584-0100). For reprints of this article and others concerning Medicaid, Elder Law and Estate Planning, send a request to or visit