When applying for long term care benefits through Arizona Long Term Care Systems (ALTCS), people are often surprised by the volume of information and documentation that ALTCS demands to see.  In particular, ALTCS may require specific proof and financial documentation if the applicant sold real property within five (5) years of date of application.  

If someone applying for ALTCS has sold real property within the last five (5) years, ALTCS requires a great deal of documentation to show how the proceeds were spent.  We must provide the settlement statement for the sale of the property.  We must show the bank statement for the account the proceeds were distributed into.  Then, we must show bank statements for every month thereafter showing how all of the proceeds were spent.  Yes, this could mean we may end up having to share five (5) years of bank statements.  If proceeds were split between multiple accounts, then we must provide bank statements for all accounts to trace where the sale of house proceeds went.  Further, (yes, there is more), for any checks written exceeding $500.00, or for any transactions whatsoever exceeding $500.00, we may be asked to provide copies of actual invoices paid.   

For example, if your mother sold her house in 2018, deposited the proceeds in her checking account, and then paid costs of caregiving out of her account, we will need all invoices for payments made to the caregiver.  We will also need bank statements for the checking account for every month from date of sale until all of the proceeds are spent.  This is an ideal example, where proceeds went into one account, and then were spent on one thing – caregiving.  In realty, it often does not happen so simply.  Often proceeds are split between multiple accounts, and records are not kept for how the proceeds are spent thereafter.  If you cannot provide the requested documentation, it may result in delay of application approval or even a denial.  

If you take away one piece of advice from all of this, let it be this: keep good records!  Keep copies of all invoices.  Keep copies of all bank statements.  Do not transfer money to other family members accounts to make it more convenient to pay bills.  This may result in ALTCS assessing a transfer penalty, unless we can provide proof in the form of invoices to show how funds were spent.  This can make the future ALTCS application more complicated that it otherwise needed to be. 

Last, if a family member will be helping someone manage money, it is very important to make sure there is a durable financial power of attorney in place that allows the agent under power of attorney to plan for long term care, apply for benefits, and enact a spend-down plan.  Remember, an agent under power of attorney may only perform the tasks listed in the document.   

If you believe ALTCS benefits may be needed for a family member within the next five (5) years (or more), contact us today to discuss what you can do now to prepare for that future successful application.  Keeping good records, not making unnecessary transfers, and being aware of what future disclosures will be required could make all the difference later! 

Nothing in this blog is meant to provide or be a substitute for legal advice; this is only intended to provide general information.  If you or a loved one have questions regarding ALTCS benefits, eligibility criteria, or the application process please contact our office at 480-922-1010 to schedule a consultation today. We have helped hundreds of families, just like yours.   

-Megan Selvey, Esq.