Medicaid & nursing homes

Under Medicaid laws, if you transfer certain assets five years before you apply for Medicaid, Your access to Medicaid can be delayed, the length of the delay depending on the amount of the transfer.

While federal tax laws allow you to transfer up to $14,000 a year without having to pay a gift tax, Medicaid still treats that as a transfer an it can delay your benefits. Any transfer you make will be looked at no matter what the amount or reason. Even if you give money for an anniversary, birthday or a charity could count for a penalty.

If, all of a sudden you become Diamond Jim Brady an start spending money that will prompt the State to look into what you are spending it on.

While most transfers are penalized, there are some that are exempt and when you go into a nursing home these won’t count against you.

You can transfer these assets to the following people and not have to worry about the waiting period.

  • your spouse
  • a child who is blind or permanently disabled
  • a trust for the sole benefit of anyone under age 65 who is permanently disabled

Also, you can transfer your home to the above people as well as the following:

  • a child who is under age 21
  • a child who has lived in your home for at least two years prior to your moving to a nursing home and who provided you with care that allowed you to stay at home during that time
  • a sibling who already has an equity interest in the house and who lived there for at least a year before you moved to a nursing home

For more info Medicaid’s transfer rules, click here.