The notion that you cannot give anything away if you want to qualify for Medicaid is a myth; however, this is a complicated area of law. Before gifting away assets or making transfers of property, you may wish to consult with an experienced Elder Law Attorney.
Medicaid Eligibility Transfers of Assets Rules
In general, the transfer of asset rules prohibits uncompensated transfers, and creates a penalty for transfers made within a certain time period from the Medicaid application date. This means that generally you cannot give your assets away. The “look back period” is five years. The Washington State Department of Social and Health Services (DSHS) will look back five years from the Medicaid benefits application date to see if any assets have been gifted.
Uncompensated transfers of assets may delay eligibility for Medicaid. The more money or property a person gives away, the longer the delay for eligibility. Currently DSHS imposes a one month penalty for each $9,038 gifted. By way of example, a gift of $117,494 would result in a 13-month penalty period. During this time the applicant would not be eligible for Medicaid Long-Term Care benefits.
Transfers not made for the purpose of qualifying for Medicaid Long-Term Care benefits should not result in a delay in eligibility. However, there exists a rebuttable presumption that transfers are made within the lookback period are made for Medicaid eligibility purposes.
Certain Transfers Are Exempt From The Medicaid Transfer Rules
Transfers exempt from the rules do not cause a delay in eligibility. Exempt transfers include:
- Transfers to a disabled child or to a Medicaid compliant trust for the sole benefit of a disabled child;
- Transfers to a Medicaid compliant trust for the sole benefit of any disabled person under 65 years of age; and
- Transfers of exempt resources other than the home or sales contracts (but only done after Medicaid benefits are awarded).
Asset Protection Estate Planning
We can help you protect your assets while still obtaining Medicaid Long-Term Care benefits.
Further, at Elder Law Group PLLC we will work hand-in-hand with you to design an Asset Protection Estate PlanTM that distributes your property according to your wishes, minimizes taxes, and simplifies or eliminates the probate process. We make the Estate Planning process a positive one for you.
Contact us or call (509) 468-0551 (Spokane office), or (509) 579-0206 (Tri-Cities office), for personal, compassionate guidance in Asset Protection Estate Planning and Elder Law.