Estate Planning Isn’t Just For The Elderly

Happy, smiling couple in their sixties.

Think Twice Before Shredding Your Account Statements

By: Anthony J. Enea, Esq.

It was not too long ago that we were told we would be living and working in a “paperless society.” I envisioned my desk not having a shred of paper in it. As I look around my office today, I think it is safe to say that the predictions of a “paperless society” were as accurate as those of the Y2K computer apocalypse.

Perhaps, most illustrative of how paper intensive a society we have become is the documentary proof required by Medicaid for Nursing Home Medicaid eligibility. The applicant, often an ailing senior, is required to provide documentary proof literally from the moment of birth to the date the application is submitted. If the applicant has not been in the habit of safekeeping biographical documents such as birth certificates, marriage certificates, divorce papers, naturalization documents and military discharge papers, the task of preparing and filing the application is daunting. This process can be especially difficult for an applicant who has not retained legal counsel and attempts to do it on his or her own.

The documentary proof required by Medicaid for a nursing home application is onerous. The applicant is required to provide financial records for the five years preceding the date nursing home Medicaid is requested to begin. These records include copies of federal and state income tax returns with 1099’s and W-2’s, copies of all account statements, both bank and brokerage account statements. Copies of all checks, deposits and withdrawals of $3,000 or more (for Westchester County applications) with explanations thereof must be provided. Perhaps more than any other documentary proof, Medicaid’s requirements for the account statements and explanations creates the greatest difficulty for the applicant, especially in cases where the applicant has multiple bank, brokerage and mutual fund accounts and/or kept his or her finances separate from his or her spouse.

Even in the unlikely case where the applicant has been able to locate all of the required account statements, the likelihood that he or she will also have copies of all checks, deposits and withdrawals of $3,000.00 or more, with explanations thereof is unlikely. Fortunately, banks and major financial institutions are required to keep electronic copies of accounts. However, most banks don’t keep the records for more than eight years, and bank mergers often create problems for the customers.

In conclusion, I suggest that one maintains all of his or her financial records for at least five to seven years as his or her eligibility for Medicaid may hinge on their availability.

Enea, Scanlan & Sirignano, LLP