At 80 years old, he looks like mid-60s. When I told him that, he remarked, “Thanks, but the old noodle is giving out. Doctor says I’ve got dementia.” His wife nodded in vigorous affirmation. She added, “He goes to the store with a list, but always messes it up.” She was not trying to be hurtful–rather, she just wanted me to know how things really sit. This time, he nodded in animated agreement.
They have been clients of mine for years, but they had urgently called this week to “get their affairs in order.” He has his brain scan results, and she has emphysema and COPD. She has already signed a DNR for herself.
As I listened to the facts, she threw me a bombshell. “I heard about the five-year Medicaid look-back rules, so I cashed in my IRA and gave $10,000 to each of our four adult children.”
I was silent.
I gulped and said, “That was a mistake. Based on what you have told me about your health and your assets, it is highly likely that one of you will need nursing home care within the next 5 years. Your gifts to your children will create a six- to eight-month penalty period of ineligibility for Medicaid nursing home benefits.”
She asked, “What should we do?”
I answered, “You should call your family members and tell them that you made a mistake and to please give you back the money.”
Her look told me that she could never do that.
Her husband said, “We screwed up, huh? We should have called you first.”
Most elderly clients who give away money due to a medical crisis will need long-term care within a short period of time. If you know a client or a client family member who is thinking about giving away assets “to protect them from being lost to nursing home expenses,” please tell them to call an elder law attorney first. Without consulting someone who knows the rules, many seemingly simple actions can trigger penalties for seniors. Please contact my firm at
