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“Gifting and Medicaid” by Attorney Nicole LivingstonWhat is a look-back period?

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  What is a look-back period?   When you file an application for Long Term Care Medical Assistance, you are required to provide five years of financial statements documenting transactions in your accounts.  You may also provide five years of tax forms.  The purpose is to determine whether or not you gave away assets during this time frame in contemplation of filing an application for Medical Assistance.  In other words, have you gifted any assets with the intention of impoverishing yourself to qualify for Medical Assistance?

There are several different ways to gift assets.  The simplest way is to gift cash.  When the state agency is reviewing your financial records, a cash withdrawal from an ATM or an over-the-counter cash transaction is questioned.  This could be a gift.  You need to prove that you regularly withdraw the same amount of cash each month as part of your normal routine.  Many adults do not use check cards or credit cards and this may be opening you up to a higher level of scrutiny if you need to file a Medicaid application.

You may need to prove that you did not gift the cash by providing receipts for goods and services.  It is probably good practice for anyone over 65 years of age to keep receipts, especially for large purchases with cash, and keep a detailed accounting for at least five years of financial transactions.

Another way to gift is to add someone’s name to an account or your real estate.  When you do this, you have made a gift for Medicaid purposes and are subject to the five year look-back period.

If you file an application for Medical Assistance during this five year look-back period, you will be penalized.  The penalty is one month of ineligibility for Medicaid for every $6,800 you transferred.  The penalty doesn’t start until you are in a nursing home, apply for Medicaid, and are otherwise eligible.  This means you are qualified for Medical Assistance except for this gift.

Since there are other reasons you may not want to add someone to your accounts or your house, you should meet with a qualified estate planning and elder law attorney before you make any final decisions to take steps to file for Long Term Care Medical Assistance.

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