During the National Aging and Law Conference in October 2001, an Indiana elder law practitioner highlighted a Medicaid planning technique using U.S. Savings Bonds. As reported in the November 16 issue of the National Senior Citizens Law Center's Washington Weekly, Michael Spurgeon of Anderson, Indiana, said the technique takes advantage of the fact that Series EE and Series I Savings Bonds cannot be redeemed until at least six months after their purchase date.
For example, bonds could be purchased by a married nursing home resident, with the community spouse listed as co-owner, one month prior to applying for Medicaid. The bonds would not be considered an available resource at the time of application. After the application is approved, the community spouse could redeem them without affecting the resident's eligibility.
Spurgeon noted that the Indiana Medicaid Manual, § 2615.45.00, supports this type of planning. The manual states that '[d]uring the six month period [after purchase], a U.S. Savings Bond is not to be counted as a resource.'
An Indiana CLE publication, Medicaid and Medicare Benefits for the Elderly (HalfMoon LLC, 1999) offers a more detailed discussion of this strategy in the chapter 'New Medicaid Planning Techniques Using U.S. Savings Bonds and Annuities' by Roger T. Coffin.
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