Radio Transcript: SB 301


     In today’s program on Elder Law and Estate Planning, we are going to discuss the continuing changes in the law.  Information for this program has been taken from a variety of sources including Indiana Legal Services and comments by Claire Lewis on behalf of the Indiana Chapter of the National Academy of Elder Law Attorneys also known as NAELA. 

     We have previously discussed the requirements of the Deficit Reduction Act of 2005 and the proposed Indiana regulations to imp0lement that Act.  As a result of the draconian regulations proposed by the Family and Social Services Administration, Indiana legislators heard a large outcry from senior citizens and their advocates.  The result was passage by the Indiana legislature of Senate Bill 301.  This Bill has been signed into Law by Governor Mitch Daniels and will become effective October 1, 2009.  This means if you want to make a transfer that will be effective under the existing rules it must be done before October 1, 2009.  While there are several benefits to making a gift under the existing rules, the most important is that the look back period is three years rather than five years.  If you wish to take advantage of the existing rules you should contact an Elder Law or Estate Planning attorney as soon as possible to allow adequate time to do appropriate planning. 

     Senate Bill 301 provides that total annual gifts of up to $1,200 may be made to a relative or charity while not disqualifying an applicant who is eligible for the receipt of Medicaid benefits.  In addition, Senate Bill 301 prohibits the Deficit Reduction Act of 2005, also known as DRA 2005, from being retroactively applied in Indiana once those rules go into effect later this year.  Turning to Senate Bill 301, it specifically states that

[B]eginning October 1, 2009, the office of Medicaid policy and planning ([hereinafter the] office), in determining eligibility, may not consider a total of $1,200 per year in contributions by an individual to a family member or nonprofit organization as an improper transfer and may disregard certain contributions. . . .  [T]he office may not apply certain penalties to noninstitutionalized individuals for the disposal of assets. . . .  [T]he  rules adopted by the office of the secretary concerning transfer of assets may not: (1) apply to a transfer of property that occurred before the effective date of the rule; and (2) require an individual to return all assets in order to reduce a penalty period for the transfer of assets. . . .  [B]eginning October 1, 2009, a trustee of certain trusts may not distribute trust property except for state and federal taxes to any person entitled to a payment from the trust until the office has been fully reimbursed for rendered assistance.

Indiana Sen. 301, 116th Gen. Assembly, 2009 Reg. Sess. (Mar. 26, 2009) (emphasis added). 


     Again, the effective date of Senate Bill 301 is October 1, 2009.  NAELA, along with its coalition of community organizations, was instrumental in the passage of this bill which prohibits retroactive implementation of the Deficit Reduction Act among other things.  It is a significant victory for the older adult and disabled populations that we serve. 


     The foregoing is a brief discussion Senate Bill 301.  It should be recognized that the Medicaid rules are complex and ever changing.  If you want to receive the primary benefits of Senate Bill 301 by planning or gifting prior to October 1, 2009 you should meet with an Elder Law or Estate Planning Attorney to make plans to control your financial future.  For a free booklet entitled “Medicaid in Indiana,” call Yoder & Kraus at 347-9400 or 1-800-545-6453.  The toll-free number again is 1-800-545-6453.