(P)sy(N)ch(R)o: Von Goom Meets Van Doom, the Ghost of Near-Miss Future

(or How a Lowly Millionaire Making a $20 Christmas Gift Will End Up Living on the
Sidewalk in a Cardboard Box or Worse) - Entry 5.1: 1/21/2018

By: Michael Wolfson, Janet Kadoe and Eva Gustley

Janet: The paper is shape(shift)ing up fine, Mike, but we need some opening dialogue.

Mike: That’s great, J. But, Eva, don’t you see any alter-egos, doppelgangers or ghostwriters around?

Eva: I even see a Ghost of Near-Miss Present, namely, Von Goom himself, here to insert a dimen(s)(tia)onal
disconnect from the “here and now” of reality.

J: So, tell them about Von Goom, M.

M: You know what, J., the readers can google that gambit.

J: Well let me, then. Von Goom’s Gambit. Victor Contoski’s chess science fiction story from 1966. Play the chess
moves that positionally exact insanity, death or worse for the opposition, unless the opponent first plays Von
Goom’s Gambit reversed.

E: Good one J. Save the readers time googling and gargling with the garganta so they can spend more time with
us!

M: OK folks, let’s go. We must now assist some of the quasi-meta-advisors to the quasi-advisors to the
millionaires.

J+E: Why bother?

M: Because that is our direction (thanks, Hitch, for the recurrent one way sign). Plus, we can see what might
await them, and it is not pretty. A foreboding foreshadow.

So now the co-authors have combined as a ghostly trio to this near-miss tale:

When Van Doom comes to call:

Are you linked to the future? Connected? You are alive, right? Can you shape it, steer the course, see it,
change it, or predict it? Make a plan based upon a gut instinct, gifted insight or intuition? You sure want to
navigate the course forward as best you can. And you must gamble on the unknowns, and so delay, where
necessary, at least if you think the unknowns will reveal themselves and no harm will befall you in the interim.
Play the odds? Quantify a future that you have little or no information about? Sometimes, you must take such
gambles. After all, danger even awaits getting out of bed or taking a trip to work.
 Ever think that you can go further? Try to catch a glimpse of the “yet to come”, look around corners or
into a crystal ball? Ever think insight, intuition, visions, etc. might provide an assist as you navigate the course
from the “here and now” to the “what will be”? Rely on your gut or a hunch?

If you think you can “see” it, you are a believer in the “precognitive”. But, if you think you can change
future states through will power alone or some other “a-causal agent”, then you are a believer in the
“psychokinetic”. Prayers, chants, spells, hexes etc. are in your cache of psychoweapons. Much of this is not per se
outside the domain of science, but science has failed to supply any evidence to date.

The future awaits, but will not wait. So why do anything to jeopardize it. Next time you make a lifetime
gift or put some pocket change in a church basket, think what you are doing. Better pray that it won’t come back
to haunt you. (We will soon see.)

Introduction to Weirdness Science as Foundational to a Frequentist’s Forethought:

We do not profess a belief in “precognition”, at least in the sense of a conscious perception of events prior
to their occurrence. But, perhaps our conscious mind(s) can be filled with a “pre-clog apparition”, a Ghost of
Near-Miss Future, so to speak. Dictionary definitions of “perception” are replete with words implying or at least
hinting at a conscious awareness. (e.g. mental grasp, understanding, knowledge, insight, observation,
comprehension etc.) Without quibbling, then, as to whether “unconscious precognition” is actually an oxymoron
or a pleonasm, we regard our interpretation of that notion to be safe. (And, as long as we are coining terms, we
might instead use psychronicity, psychosynchro-cognition or simply (P)sy(N)ch(R)o.)
Can science categorically exclude the psynchro then? Karl Popper, the father of foundations of scientific
analysis would say no, as would we, since the concept does not generate testable propositions and, hence, is not
falsifiable. Popper would be inclined to go further and argue that it is a mere metaphysical “research” project,
although, unfortunately, he would still be inclined to describe such a project in pejorative terms. (Actually, Popper
used this very argument in critiquing the Theory of Evolution, but he softened his stance in his later years.)
Physicists might retort that any “future” influence would require superluminal interactions. Reverse
causation in time has never been “observed”, at least not in the macro world. The quantum physicists may, of
course, ring a different Bell (as in John Bell). (And, we must not forget the various observations as to quantum
entanglement, emergent effects, cancellation and randomness, the law of large numbers, etc. For our insight in
this regard, please refer to the prior articles in this series.) But how do you scientifically “model” the potential for
unconscious influences backward in time? Popper might laugh. We might as well.
Steven Hawking refers to a chronological arrow of time as separate from a psychological arrow. To be
wholly dismissive of mental processes as distinct from physical ones would sure make life easy for the scientific
researchers. Full reduction of all to the physical, however, is not where we are yet. And, we well may never be!
Reduce it all to what we can understand? How egocentric.
Of course, you don’t even necessarily need reverse time effects, if you accept the notion of an extra or
preternatural world. A metamorphosis from superluminal loopholes to subliminal undercurrents via a supra-
natural unconscious pre-clog-apparition. Falsify that, brave new scientists! Case closed! Holographic projections
of the master Grand Deceiver’s grandfather clock? Only one possibility among many. And for this, you don’t even
need to posit a multiverse, or rapid accelerated expansion of this universe, or dark matter or dark energy running
rampant in the admittedly consistent and rigorous imagination of cosmological scientists. So, who is cooking the
books now?
Science is a mere belief system, albeit consistent and recursively axiomatizable, wholly dependent upon
unproven postulates and methods. Don’t argue with success? We can and we do. But, can the Ghost of Near-
Miss Future help us in our Medicaid and entitlement planning efforts? We will now see. And, don’t expect any
other assist outside the lunatic fringe and the ghost-busters. This is a gambler’s gambit. Good luck! And lives and
freedom are at stake as you will see.
So, how do we deal with a future filled with unknowns and uncertainties? Decision sciences will tell you
that the best you can do is diversify risks. (Here, that would translate to “beta event analysis” and the
“covariance” of uncertain or unstable future states on decision tree chance and option nodes. Think of the
unstable wormhole in Star Trek. One can never be sure what future awaits.) Navigate a course, and rely upon the
present value of future information? Good luck with that! Stay in bed and you still might encounter a meteor. A
“plan” by necessity involves links to the future, the primary province of many ghosts and hobgoblins. So, can a
rational actor make a sound plan? Are you crazy? Von Goom’s gambit will thwart your plan every time! And Van
Doom will “see” it, but will he “point the way” to the tombstone? A ghostly visitor from the future might alert the
precognitive? Before the grim reaper arrives, then, you will be visited by the grim teacher here to inform.

Medicaid Entitlement Lunacy:

Here, then, are two of the tried and true legal maxims that we have now revised and distorted to reflect the
extent to which honored tradition is currently in jeopardy:

1. “Synchro non curat lex”- The law does not deal with the trivial or the coincidental; and
2. “Nemo dat quod habet”- You had better not give away what you own.

Before proceeding, we would like to state by way of disclaimer that the information contained in this article
is in no way intended to serve as a replacement for professional tax, legal or financial advice. Nor should it. Any
use of the information contained here is strictly at the reader's discretion. We specifically disclaim any and all
liability arising directly or indirectly from the use or application of any information contained in this article. None
of the authors is an active attorney or financial advisor, so do not rely on anything herein as expert advice. Anyone
who seeks or needs such advice should consult his or her appropriate professionals and consultants to evaluate his
or her unique situation and needs. Take this admonition seriously for your life and/or freedom may well be at
stake. Financial ruin may result from failure to carefully follow the complex maze of laws as discussed below. Even
prison might await those who run afoul of their strictures.
We often face Gordian knots in life, tightly bound paradoxical puzzles that even Sisyphus might give up on.
Mainstream physicists have to contend with quantum reality and a smorgasbord of subatomic particles. Grand
unified theorists are left looking at 13 or more dimensions for explanations, consistency and perceived complete-
ness. Cosmologists are looking at the need to revisit the basic equations of Einstein and Newton in order to
explain dark matter and energy and accelerated rapid expansion. But the granddaddy of puzzles belongs to the
legal quagmire revolving around entitlements under U.S. laws.
A friend asked us the other day to take a look online at the state of the Medicaid entitlement laws in the
United States and in a few States in particular. Our initial reaction was, what are you nuts? You are a millionaire
and then some. We understand that not all of our aging population is financially quite so well off but, come on,
what is the problem? He said: take a look anyway. And we peaked at the various rules and laws. We will never
again underestimate the extent to which requirements for certain entitlements in America have become so toxic.
Part of our research included interviews with numerous attorneys, accountants, and financial advisors,
including those practicing in the elder law and/or Medicaid planning areas. Their general advice, once a typical
family situation is hypothesized ranges from "you cannot do it and you are crazy to try… nothing will work" to
"certain planning techniques if carefully implemented MAY work", but "no guarantees" to "bring the relatives on
down and I will read them the riot act" to “stop chasing ghosts”.
Welcome to the world of Medicaid Entitlement lunacy. We are stunned. We did not write these rules, so
don't blame us! The elderly cannot safely make a gift to anyone, including relatives, within 5 years of a Medicaid
application. To make matters worse, this lookback period can be arbitrarily and administratively changed to 7 or
10 or more years, and the change can constitutionally be applied retroactively, since we are dealing with
entitlements, not rights. This has already been done once before, changing the period from 3 to 5 years. So how
then are you to plan your gifting?
Several attorneys we spoke with, including an elder law attorney confidently stated that the (as of now) 5
year lookback period applies from the date the elderly person first checks into a nursing home. But, this appears
to be incorrect. It looks like a situation where the attorneys themselves are mistakenly confusing the lookback
period with the "snapshot" assessment used by Medicaid as a preview to spy on the assets of their potential
victims. And, if the experts in the field cannot tell you what is going on, how do you think you might do navigating
the field on your own or even with help?
Apparently, the snapshot applies to calculating a resource allowance, while no particular application to a
widowed spouse is involved. And a lowly millionaire is in the ballpark after retirement fund and other taxes are
paid of lacking funds beyond a very lengthy nursing home stay of a little more than five years. And, at a given net
worth, a lesser period would apply to those that might delay entry.
So what can elderly millionaires do in their waning years when most would think they should be able to
enjoy what life is left to them? (The life that they scrimped and saved for decades to enjoy.) Let us look: No gifts.
Not to a church, not to Salvation Army, no one. An elderly person cannot buy lunch for another- separate checks!
Tips? Maybe not. No Christmas or birthday gifts. Doing so will, when discovered, be considered fraudulent
transfers. Medicaid finds out when you tell them about transfers in various documentation signed under penalty
of perjury. The documents and disclosures are among the many which also contain carefully hidden language
tricking emotionally distraught family members into personally guaranteeing nursing home and other expenses.
Lie, get caught, and you are put in jail. Tell the truth and you are put out into the streets. Even a “designated
innocent” will not work. This is the ultimate “Catch 22” that, were they to make a movie about, no one would
bother to go, since the plot would be considered too unbelievable. Truth may be stranger than fiction, but truth
here has been warped to mind bending extremes.
Can it get any worse? No cash out of banks without receipts. Originals kept in a shoe box. Carefully
documented cash transactions. Otherwise, a Medicaid administrator may conclude that the unproven cash
withdrawals are for gifts. Some administrators may take some sympathy, but are you willing to take that gamble.
Hospitals today are already being caught “dumping” the elderly and mentally ill. Nursing homes too? You have to
look many years into the future and the laws can be expected to change and they will not change for the better.
Baby boomers are aging and medical science is assuring that more and more will reach their twilight time. And
don’t think your financial situation can be kept private? Medicaid will scrupulously review check books, bank and
credit card statements, and other financial records in order to throw folks onto the streets and into jails. (We wish
we were joking!)
Real estate or other financial transactions for other than fully justified market based value are considered
fraudulent. All rents or payments to family members are considered "presumptively" fraudulent and the burden
to overcome this presumption is heavy.
Should the relative be determined to have engaged in a fraudulent transaction by reason of gifting or an
exchange for less than fair market value, a penalty period is assessed during which time no Medicaid funds are
given out. The penalty period begins at around the time an elderly person is 1st "otherwise" eligible, i.e. the day
he first needs the money. The elderly person can live on the sidewalk in a cardboard box as far as the government
is concerned. Of course, the relatives receiving gifts can, assuming they are still living, haven’t gone on a spending
spree and have not left town or the country or saddled themselves with debts, return same and have the penalty
period removed. (A full 100% must be returned or the penalty period will not be shortened even one day. This
court ruling is only an example of the toxic climate our elderly citizens face.)
Of course, the elderly person is totally free to throw the money out the window or burn it (documentation
required and criminal penalties for destroying currency will apply). Such actions are not transfers. He can also
spend it all freely in a fun weekend in Las Vegas. He can even give it all to relatives provided that he is willing to
fully relinquish control and has a perfectly accurate crystal ball with a five year and one day date-of-Medicaid
application window and provided the rules are not changed in the interim. The law does have an "undue
hardship" exception which is VERY rarely granted.
This is strictly a middle and upper middle class squeeze. The poor have nothing or little to transfer. The
billionaires probably won't need Medicaid assistance. And, with Trump, newly appointed conservative judges, and
a government saddled with debt, do you think that you can count on these rules becoming more lenient? If you
do, we have a bridge for sale!
And it gets even worse. Many elderly would like to enjoy their final years moving in with a relative. The
millionaire types do not feel strapped, so they wish to pay their own way. Rent! So, you would think that one
should be able at least to pay shared expenses. Even they must be documented with original receipts maintained
indefinitely. Of course, it would be best to pay bills directly. Most lawyers seem fine with charging more than that
for rent if conservatively determined to be fair market based (and justified with appraisals, letters from realtors,
comparable rental ads for the area, etc.)
Also acceptable might be additional amounts paid pursuant to a carefully written caregiver agreement, if
thoroughly documented with daily logs, receipts, statements from 3rd party caregivers as to how much time each
particular activity should take and how much they would charge (1/2 hour to cook, etc.), and, importantly, a
statement signed by a doctor stating that, were it not for such care, he would have no choice but be in a nursing
home.
Any remaining monthly amounts that are paid might be handled as some form of arm’s length real estate
transaction. Either an option to buy, land contract or a loan secured by a mortgage or all three might be possible
under certain circumstances. Remember, diversity is an important strategy looking forward to a world replete with
unknowns and uncertainties. But, all specifics must remain for you and your advisors. Here we can offer nothing
but a hint as to a brainstorm of ideas that might possibly coalesce into emergent well defined planning techniques.
A float and flow without focus, for now. Careful though. A Medicaid administrator might just say an option to buy
is a sham with no intent to exercise. You best be prepared to justify its economic substance. An option with a
strike price below market or with no specific expiration date? Watch out. And the option is a real estate asset of
the elderly, which assuming it has a value, can be taken away as with any other asset.
Presumably, who cannot deny the legal effect of a secured loan. The loan would have to bear market rate
interest and be recorded. It might be a home equity or line of credit type. Even sequential renegotiations might
work. A joint mortgage holder to avoid probate might present a problem, since as with joint bank accounts,
Medicaid may look at it as a "transfer". But, disallowing such a transfer is not problematic if monies are fully paid
over to Medicaid. Here, you may end up merely assuring eventual payments over to them. The possible necessity
of probate and effect on the borrower's credit rating would be additional downsides. Tax ramifications abound in
all such planning ideas, but none seem to be too much more problematic than collecting simple rents and income.
The consensus appears to be that careful implementation of strategies of this variety might work. And, you
certainly cannot ignore the admittedly small chance that an elderly relative might outlive his money. You are not
here to play Russian roulette with loved ones! Since you can never be certain how long your elderly relative
might live, you must not do anything to corrupt his future. Given the risks, uncertainty and dire consequences of
mistakes in this regard, the only other alternatives in the rental context would be a drastic or total reduction in
rents, the elderly moving to 3rd party accommodations at whatever the cost or their buying the real estate
outright. (Of course, then they would have no choice but to themselves charge family members rent, since free
accommodation would also be considered a gift!)
So, gifting and below market transactions are verboten. The Latin phrase “nemo dat quod non habet”
translates to “one does not give what one does not have”. This is the “shallow pocket” theory upon which the
United States was, in part, founded. (After all, England’s debtor prisons were filled to the brim back then.)
However, today the 21st Century maxim has become “nemo dat quod habet”, i.e. “one cannot even give what one
has”. And people that are not elderly are by no means immune. Who is certain that they won’t be living in a
nursing home in the next 5 or more years? So, next time you receive a call asking for a charitable donation, you
may suggest that they first ask members of Congress who passed the Medicaid laws. A gift to charity or a birthday
gift can corrupt anyone’s future. The only gifting that may be guaranteed to survive challenge in the face of these
challenging times, then, may be testamentary (as opposed to lifetime or inter-vivos gifts) gifts. Even those,
however, may be at risk for estate recovery actions, “super” liens and the like.
The lunacy does not end here. After explaining why any gifting cannot be done, we must consider the
"maximize gifting" ideas. Medicaid planning lawyers are pushing an irrevocable trust arrangement such that after
being told gifts are impossible, they nevertheless advise you to gift all assets to an irrevocable trust wholly outside
the elderly’s control. He cannot be trustee or beneficiary. No strings, except possibly retained powers of
appointment. The idea here is that enough time might just elapse to bring some assets outside Medicaid's reach.
3K or more in legal fees, the Grantor loses control, must close any IRA or related accounts and incur substantial
taxes, trust bank accounts, another administrative nightmare, and NO GUARANTEES! As some lawyers flat out
stated: "forget it, it will not work."
One Medicaid lawyer went even further when he stated: "Forget everything you have ever known about the
law. The Medicaid rules are insane." And this is not all the elderly person must contend with. The myriad rules
and contractual arrangements involved in nursing homes also borders on the lunatic fringe. And, of course, family
members must be cognizant of filial responsibility laws, which in some cases can make them civilly and criminally
liable for the care of their parents. As the Germans might say: BringSchuldZwang.
So, who then is crazy? Von Goom’s gambit reduces the best of minds to the lunatic fringe. The key is to
make sure your opponent is not positioned to reverse the gambit. Medicaid and the legislatures that have
enacted these laws have employed this opening and don’t expect any counter-play to work.
So, now we have hinted at a few planning ideas that might just help the quasi- and meta- advisors to the
millionaires. And if we succeed in helping anyone along the way, it is not inconceivable that we might also put a
few government administrators in the unemployment lines, not to mention some lawyers, future entitlement
planners, scientists, philosophers, ghosts and ghost busters, to name a few. (Alter Ultra Uber Supra Ego for the
humblest of coauthors!)
To summarize, every time a U.S. citizen makes a gift or engages with family members in a below market real
estate or other transaction, he is giving up some control over his future well-being. Further, he is burdening his
loved ones with his potential for future needs. This is less true for those with a greater life expectancy. Anything
that you do has risk, of course. As an example, not making gifts might just infuriate the greedy. Some planning
techniques, and there is no shortage of expensive ones out there, may improve, but will not eliminate, the risk
profile. Of course, you can give everything you own away early, incur various transaction expenses including taxes
and hope the recipients will assist later, will not die, spend, be held liable to their creditors etc. For obvious
reasons, most don’t think giving up full control of what they own is a good idea.

A Few Fun Hypotheticals:

To further highlight the absurdity of expecting the elderly to navigate the Medicaid rules that are forever
in flux, then, consider these filmic hypothetical examples as tribute to the darkest of Hitchcockian humor:
(1). Van Doom, the Ghost of Near-Miss Future cannot make a gift due to possible ghost council restrictions
on gifting to the hauntees. So if you find this grim reaper trying to give Scrooge a Christmas gift, you must suggest
that he simply return the envelope, unopened. Although Van Doom probably makes gifts in the form of post-
dated checks, there is an issue as to whether receipt of same is the constructive receipt of cash. Some states also
have laws concerning conditional gifting. (e.g. Ohio seems to consider a wedding ring as having that weird status.)
A gift requires donative intent and a transaction. Acknowledgement of receipt with knowledge of the contents of
the envelope may prove sufficient. Unless this near-miss apparition is fully aware of the future state of the law,
though, it may not work. Nor will he even know whether the lookback will be 5 or 7 or more years. And, further,
Scrooge ends up compelled to give Tiny Tim some turkey. End result: Scrooge in the slammer or on the streets.
And, Van Doom forever haunts, for no jail will constrain him.
(2). Bubba Ho Tep. Elvis (and not his doppelganger) and JFK are in a nursing home. Bubba Ho Tep is the
ghost/mummy haunting the home. Problem is that Elvis has gifted too many Cadillacs in his lifetime to the Denver
police force. Too much gifting puts poor Elvis on the street. Slaying the near-miss ghost will do him no good. It’s
not the mummies and ghostly apparitions from the future. Rather, it’s the near-miss Medicaid rules he must avoid
and anticipate. He can wait 4 years and 11 months and, whoops, suddenly the lookback rule has been changed to
7 years and applied retroactively. There is a near-miss for the ages. Poor Elvis, now as a street musician!?
(3). Or, consider the Great Rupert. Rupert the squirrel is annoyed that the landlord is hiding undisclosed
Medicaid and “tax dodge” funds in the form of “under the table” cash in his wall, so he decides to bestow the
“windfall” to Jimmy Durante and his family. Here, Rupert is not an agent of the landlord or Medicaid. He may
likely, instead, be considered an “Act of God” equivalent. Even Durante’s family believes the money is coming from
Heaven. End result: the landlord joins Durante’s family in jail or on the streets. Lesson: Don’t violate the law
unless you think a jail cell is better than the sidewalk.
You cannot win. Unless you are lucky enough to die early or win the jackpot that puts you in the multi
multi millionaire category, i.e. the “rich” house. At least, better than the jailhouse or no house. And, remember,
an elderly millionaire can buy as many lottery tickets as he want without running afoul of gifting rules! Again, no
gifting is involved. The old Avalon Hill game Squander comes to mind. First to lose a million is the winner.
Coda.
The first thing a Medicaid lawyer will ask is: how long do you plan to live? The second thing they ask is:
how long do you plan to stay in a nursing home? Then you are asked what future tax rates will be along with
future medical and nursing home costs, future inflation rates, investment returns, cost of capital, etc. Finally you
will be asked to decide as to whether relatives will pre-decease, move away or have insufficient assets to make up
a shortfall. And, what will be the future laws and rules that will apply? Crazy, crazy, crazy!
So, to sum and to repeat some. Legerdemain in the legal domain. Crazy as a Loon-a-trick. Ten thousand
flubber-ghosts bouncing on the head of a pin. Batty as a (John) Bell-free. (And batty as a butterfly effect too!)
Nutty as a nabob hobgob. Loosey-goosey as a Von Goom(sy). Off the cuff meets off the wall. Left field for those
that have not quite left the field.
And do not forget the self-referential blowback at the new blew b(a)(y)(e)ou. A friendly butterfly effect
from Casper’s progeny!

Copyright Michael Wolfson 1/21/2018 email: mwolfson@stanfordalumni.org

(We wish to correct an error in Entry 4.1. POCO SYNCHRO and a True IRL PSYCHO: Ted Bundy, Ghost of
Near-Miss Past. Please note that Elizabeth Loftus was an expert witness to Bundy’s earlier abduction trial, not his
murder trial.)