Older woman working on estate plan with her daughter

How to Gift Assets to Qualify for Medicaid

Are you thinking about your future and concerned about meeting the means requirements to qualify for Medicaid benefits? If so, you might be able to gift certain assets to get beneath the threshold. Here’s what you need to know about gifting assets to qualify for Medicaid.

Understanding Medicaid Eligibility

Medicaid is designed to help older people, low-income adults, children, pregnant women, and those with disabilities access healthcare. Tour income and assets must fall below certain limits to receive Medicaid coverage. When you apply for Medicaid, the state looks at your financial situation to decide if you qualify. They check your income, like wages from a job or payments from Social Security, and your assets, such as bank accounts and property you own. If your income and assets do not exceed certain thresholds, you could qualify for Medicaid benefits. This could be a problem if you’re one of the millions of Americans who have assets above the Medicaid threshold but insufficient to pay for care (such as an in-patient nursing facility) on your own.

So, what if you were to simply give away your assets to get under the eligibility threshold? If you’re not careful, doing so could disqualify you from Medicaid for a period. This is because of rules intended to prevent people from gaming the system to meet Medicaid’s eligibility limits. Always get advice from a lawyer before making any big financial moves if you want to qualify for Medicaid.

What Is the Look-Back Period?

The look-back period is a specific time frame before you apply for Medicaid, during which the government reviews any transfers of assets you made. Currently, this period is 60 months (five years) for most assets. If you gave away assets or sold them for less than their fair market value during this time, Medicaid might penalize you. This could mean delaying your eligibility for Medicaid benefits.

Exempt Assets and Transfers

Not all your assets count against you when you apply for Medicaid. Some of your belongings and certain transfers of assets won’t affect your eligibility. These exempt assets include things like your primary home, one car, household goods, personal belongings, and certain life insurance policies.

You can also transfer some assets without penalty. For example, you can give assets to your spouse or to a disabled child without risking your Medicaid eligibility. This allows you to protect some of your wealth while still qualifying for Medicaid.

Gifting Strategies to Qualify for Medicaid

Carefully choosing how to gift your assets can make a big difference in the outcome of your eventual Medicaid claim. Some strategies allow you to support your loved ones or secure your assets without jeopardizing your chance to qualify for Medicaid. Here are a few smart ways you can gift your assets:

  • Use the Annual Gift Tax Exclusion: You can give a certain amount of money to any number of people each year without it affecting your Medicaid eligibility. 
  • Create a Medicaid Trust: Placing your assets in a Medicaid trust can remove them from the look-back process. These trusts must be irrevocable, meaning you can’t take back your assets once you put them in. 
  • Gift to a Spouse: Transferring assets to your non-applicant spouse does not count against you for Medicaid eligibility. This can lower your assets to qualify for Medicaid while keeping them in the family.
  • Set up a Special Needs Trust: If you have a disabled child or grandchild, placing assets into a special needs trust for their benefit can provide for their care while helping you meet Medicaid eligibility. 
  • Pay for Education or Medical Expenses: Paying directly for someone’s education or medical expenses is not considered a gift that affects Medicaid eligibility. 

How a Medicaid Eligibility Lawyer Can Help

An experienced lawyer can offer personalized advice to help you navigate the complex rules surrounding Medicaid eligibility and gifting strategies. Your attorney can help you by:

  • Reviewing your financial situation to identify potential Medicaid eligibility issues
  • Advising you on the timing of asset transfers to avoid penalties
  • Setting up irrevocable trusts to protect your assets
  • Assisting you in the application process for Medicaid
  • Identifying exempt assets that won’t affect your Medicaid eligibility
  • Planning gifting strategies that comply with Medicaid rules
  • Creating special needs trusts for disabled family members
  • Advising you on the limits of the annual gift tax exclusion
  • Representing you in appeals if Medicaid denies your application
  • Coordinating your estate plan with your Medicaid planning strategy

Contact a Knowledgeable Medicaid Attorney in Garden City

If you’re wondering how to qualify for Medicaid by gifting assets without running afoul of the look-back process, the Law Office of Angela Siegel can help. Contact our knowledgeable team today to get the answers and guidance you need in an initial consultation session.