Because Medicaid is need based, there are fairly strict guidelines regarding your assets and how they can be handled. The purpose of these guidelines is to prevent people from giving their estate away so that they qualify. The federal law requires the state to recover the costs of services whenever possible, so your estate is basically insurance for your insurance.
This doesn’t mean that you cannot gift anything, or that you have no hope of qualifying for Medicaid if you do have assets, such as a home. An experienced elder law attorney can help you navigate the sometimes-confusing process of qualifying for Medicaid.
Medicaid has a five-year look back rule. This allows Medicaid to review your financial records for the last five years to determine if you made gifts in anticipation of qualifying for Medicaid. If you have given away substantial assets, the state may assign you a disqualification period, which leaves you holding the bill for your care until that period of time passes and you can qualify for Medicaid.
Do not confuse the rules regarding gifts and tax exemptions with gifts and Medicaid. You can gift up to $13,000 to any individual without them owing a gift tax, but gifts of any size can cause an issue when it comes to qualifying for Medicaid. If you are considering gifting your assets, speak with an attorney first.
