In New York, in order to qualify for Medicaid benefits, you must have assets below a certain threshold. The threshold is very low, and most people do not want to impoverish themselves just so they can qualify for the benefits they may need for nursing home care. It may be tempting to just give your property away to family and friends in order to reduce the amount of assets in your name. However, doing so can violate what is known as the Medicaid “lookback” period.
The Medicaid “lookback” period
Under the Medicaid “lookback” period, any gifts (referred to as uncompensated transfers) over $1,000 made within 60 months of applying for benefits to someone other than your spouse will be reviewed. If there is such a transfer, the amount of the transfer will be divided by the average monthly nursing home rate in your area, to calculate the number of months you will be ineligible for Medicaid. Simply put, if you try to spend down your assets in order to qualify for Medicaid at the last minute, it may delay your ability to qualify for benefits.
What about the federal gift tax?
You may already be aware that under federal law, you can give a person up to $15,000 annually without being taxed on the transfer. However, it is important to note that this still counts as an uncompensated transfer for Medicaid purposes. That being said, sales made for full consideration will not be scrutinized.
Seek help with your Medicaid application
Ultimately, if you are concerned about your ability to qualify for Medicaid, you may want to seek help. This post does not contain legal advice. Elder law attorneys in Williamsville may be a good source of information for those who have questions about Medicaid planning.