Asset Transfer Rules

As stated elsewhere, the applicant may have only $2,000 and the exempt assets to be eligible for Medicaid. Since the well spouse may keep $119,200.00 plus the exempt property, if the couple is over this amount, they may consider transferring some of these assets. Transfer of assets refers to a situation in which the applicant or the well spouse transfer assets to someone other than the spouse without receiving a fair consideration for the transfer. The most common example is a gift. When the applicant or the well spouse transfer assets, the applicant will be ineligible for Medicaid for a period of time. 

The Look-Back Period

The "look-back" period is the maximum amount of time DCAF is allowed to look-back at transfers of assets. Currently it is 60 months. Therefore, in the above example, if the individual transferring the $135,000, does not apply for Medicaid until after 60 months from the date of the transfer, then there will be no additional time of disqualification.  

The look-back period for living trusts has been extended to 60 months. Therefore, it is imperative, if the situation involves a living trust, that it be scrutinized very closely. 

Despite the strictness of the transfer rules, many techniques can be utilized that are legitimate and proper transfers and can reduce the size of a Medicaid Estate and to protect the family inheritance. Some of these strategies involve establishing certain trusts and legitimate gifting programs.

 

SEE ALSOPlanning Strategies

 

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