By Elizabeth A. Caruso, Esq.
Legacy Legal Planning, LLC
Myth or Fact? I can give all of my assets away to my children to qualify for Medicaid to pay for my nursing home if I need one.
This is a MYTH!
Qualifying for Medicaid, or what we call MassHealth in Massachusetts, is incredibly complex. Obviously, everyone who can qualify wants to do so as quickly as possible because the costs of nursing homes continue to skyrocket, especially in our area. There is a myriad of rules that your financial life needs to fit into in order to receive benefits. One of the most important of those rules is the “look back.”
The “look back” is a rule that states that Medicaid can review your finances for the five (5) years prior to your request to receive benefits. It is important to note that five years is today’s rule and is subject to change. If it appears that you gave away or gifted any asset in that five-year look back period and did not receive fair market value in return, the value of that gift will be counted against you as part of the qualification process.
Based on the value of the gift, Medicaid places a penalty time period against you, which blocks you from receiving benefits. This means that you will not qualify for benefits as quickly as you otherwise could and, potentially, another loved one may have to pay for your nursing home until your penalty time has run out.
I have written in previous articles as to why it is not a good idea to just give away assets; this is just another reason to add to the list. An elder law attorney will be able to advise you about the best way to protect your assets within the Medicaid rules, like the five-year look back, if Medicaid planning is important to you.
Elizabeth A. Caruso, Esq. is an attorney at Legacy Legal Planning, LLC, in Norwell, Massachusetts. She has been practicing estate planning, probate, and elder law on the South Shore for over a decade. If this article has sparked questions for you, please feel free to her at 781-971-5900 or email elizabeth@legacylegalplanning.com to schedule a time to discuss your unique situation.
