Gifting Money Will Not Fool Them #estateplanning #assetprotectionplanning #irrevocabletrust

6 Mar 2023 · 1 min

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In this segment, the speaker explains how Medicaid’s five‑year look‑back rule treats any financial gifts made before a person applies for long‑term care benefits. A $16,000 gift is viewed as an attempt to hide assets, and Medicaid will impose a penalty period equal to the value of the gift divided by the monthly nursing‑home cost. Using an example where nursing‑home care costs $8,000 per month, the $16,000 gift translates to a two‑month private‑pay requirement before Medicaid eligibility begins. The speaker emphasizes that Medicaid does not demand repayment of the gift; instead, it forces the recipient to cover care out‑of‑pocket for the calculated penalty period.

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Medicaid sees any type of a gift during the 5 years before long-term care benefits are needed as a way of trying to shift money out of your account so that Medicaid can't get to it. So yes, uh, they are going to see that $16,000 and they are going to penalize the nursing home resident for it. Now they won't come to you and make you give the money back, The way they do it is to say that, you know, $16,000 is about, let's say nursing home is $8,000 a month. That's about 2 months of care. So if this were the only thing, they would say, okay, you private pay for 2 months. That takes care of the $16,000 gift, and then we'll put you on Medicaid benefits.