Older adults often give gifts to children or grandchildren. Unfortunately, these gifts can affect a person’s Medicaid eligibility, so it is important that older adults carefully plan their gift-giving if they may eventually need Medicaid long-term care benefits.
Under federal law, people who transfer certain assets within five years of applying for Medicaid may be ineligible for benefits for a period of time. This rule is designed to prevent people who are financially secure from improperly transferring assets in order to qualify for Medicaid.
Gift tax law and Medicaid law are different in their requirements. Individuals can give up to $14,000 per year without paying a gift tax, but those gifts are still treated as a transfer under Medicaid law. There is also no exception for gifts to charities.
Some transfers are, however, exempt from this issue:
- Gifts to one’s spouse
- Gifts to one’s blind or permanently disabled child
- Transfer to a trust for the sole benefit of a person under the age of 65 who is permanently disabled
- Transferring a home to a child under age 21
- Transferring a home to a child who provided live-in care for at least two years
With proper planning, it is possible to preserve assets while still qualifying for Medicaid. Consult with an experienced elder law attorney to learn more.
The elder law attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.