The Greatest Financial Risk for Seniors: Paying for
Long-term Care, Part XIV (Exempt Transfers for Medicaid)
Previous articles in this series discussed the Medicaid gifting rules and the effect that gifts can have on your Medicaid eligibility. Last month’s article concerned one way of getting money to a family member (using a Family Care Agreement) that would not create any delay in your Medicaid eligibility if you later needed to go into a nursing home. This article continues the discussion of exempt transfers – that is, gifts that have no effect on your Medicaid eligibility.
As everyone knows, you have to be impoverished before you can be eligible for Medicaid to pay for your nursing-home care. And, as nearly everyone also knows, you can’t become eligible immediately for Medicaid simply by giving all your assets away. In other words, being impoverished is a necessary but not a sufficient requirement for Medicaid eligibility. This is because you are required to disclose on your Medicaid application not only what assets you still have, but also any gifts you have made during the “look-back” period (currently five years – 60 months – prior to the date the application is filed).
The general rule for Medicaid is that any gifts made during the look-back period will create a period of time that you cannot be eligible for Medicaid. But there are certain transfers you can make that will not delay your Medicaid eligibility. Here are the most common:
Of course, there are other considerations to take into account in determining whether to make such a transfer. For example:
Next month’s article will continue this discussion of the Medicaid gifting rules by looking at the opposite of exempt transfers – that is, instead of transfers that you intended as gifts but do not affect your Medicaid eligibility, there can also be transfers that you never intended as gifts but might well affect your Medicaid eligibility.
The content herein is for general informational purposes only and does not constitute legal advice. For specific questions you should consult a qualified elder law attorney
Note: Working with the long-term care system we have in this country, seniors and their families need to understand that despite the restrictions in the Medicaid law, it is almost never too late to protect part or your remaining assets, even when facing an immediate crisis and with no advance planning. Whether you are 75 years old and living in your own home, or have an 85-year-old spouse in a nursing home, there are steps you can be taking now to preserve part – and often a very significant part – of your life savings otherwise at risk of being spent on your nursing care. But “time works against you.” Every day of delay in a crisis can result in $250 or more of irretrievable loss, so it is important to contact a knowledgeable and experienced elder law attorney for advice sooner rather than later.
Kemp Scales is now retired, but elder-law attorney Schellart Los continues to serve clients throughout western Pennsylvania from offices in Erie and Titusville. She can be reached toll-free at (888) 827-2788 or by e-mail at email@example.com. The Law Offices of Schellart Joyce, LLC has an Internet presence at www.losscaleselderlaw.com.
The federal gift-tax exclusion is an example of the splendid impartiality of the tax system we have in our country, which gives every citizen – regardless of race, creed, or economic status – the right to give away $11.4 MILLION (or $22.8 MILLION for a married couple) without having to pay one nickel of gift tax during lifetime or one nickel of federal estate tax after death. ↑