You Can Transfer Assets to Qualify for Medicaid
In some situations, you may be able to transfer assets to help you to qualify for Medicaid benefits. However, there is a certain period of ineligibility you must consider. For any transfers made after February 8, 2006 (under rules established by Congress), the “look-back” period for transfers is 60 months (five years).
To that end, if you are planning on transferring assets, you must be aware of the potential consequences. After making a transfer, you should be careful to not apply for Medicaid until that five-year period has expired, unless you’ve worked with a Medicaid planning attorney to figure out how to do it while avoiding significant penalties. The penalties you incur could extend longer than five years, depending on how much you are transferring within that window.
One of the main reasons lawmakers extended the “look-back” period in 2005 was that Medicaid applicants would often transfer approximately half of their assets before applying for Medicaid, especially if they were already in a nursing home. They would use the remaining assets in their control to pay for care while waiting for the time period — then 36 months — to expire. The 2005 rule was meant to eliminate this alleged abuse.
However, there are certain types of transfers that are exempt from penalties within the current five-year timeframe. These include:
- Transfers to your spouse or disabled child
- Transfers into a trust for the benefit of anyone under the age of 65 and permanently disabled
You may also transfer your home without penalty, as long as the recipient meets any of the following stipulations:
- A child under the age of 21
- A child who lived in your home for two years or more before you moved to a nursing home and who cared for you in that time, allowing you to stay in your home
- A sibling with a preexisting equity interest in the home who lived there for at least a year before you moved into a nursing home
To learn how you can engage in sound Medicaid planning, speak with a dedicated Florida attorney at The Charles Law Offices today.