Newsletter

March 2018


Exceptions to the Medicaid Transfer of Asset Prohibition

When I speak before senior groups some people know about Medicaid's Transfer of Asset Prohibition. They know Medicaid looks back a certain number of years and that uncompensated transfers in this 'look back period' result in a penalty. The look back period is five years from the date of application. The penalty is not that Medicaid takes your asset but instead Medicaid denies coverage for a certain length of time based on the amount of the transfer.

However, in some circumstances an uncompensated transfer of assets does not result in a penalty. This newsletter will outline the allowable transfers.

Transfer Exceptions.

  1. Transfers between spouses are allowed. In fact, transfers between spouses are necessary to comply with Medicaid eligibility rules.
  2. Transfers to the applicant's child below the age of 21 or a child of any age who is blind or disabled.

Transfers to Certain Trusts. Medicaid allows transfers to a trust to specific individuals and when the trust meets certain requirements.

  1. To a trust for the applicant's child under 21, provided the child is the sole beneficiary of the trust.
  2. To a trust for the applicant's disabled child of any age, provided the trust meets certain requirements.
  3. To a disabled person of any age under 65, provided the trusts meets certain requirements.

Specific Transfer Exceptions Involving Home Property. Medicaid has specific exceptions when home property is transferred.

  1. To the applicant's spouse, child under 21 or child who is blind or disabled.
  2. To the applicant's sibling if the sibling has an
    - equity interest in the home;
    - who resided in the home for at least one year immediately before the applicant became institutionalized.
  3. To the applicant's child who provided care to the applicant for at least two years immediately before the applicant became institutionalized. Certain proof is required to show that because of the child's care, the applicant avoided institutionalization or nursing facility care for at least 2 years.

Please do not make any such transfers unless you consult with an elder law attorney who understands Medicaid and the transfer of asset rules.

Edward Zetlin Law is experienced in Medicaid Long-Term Care Planning; Guardianship, Conservatorship, Estate and Special Needs Planning. Don't hesitate to call if you face such an issue or if you have additional questions. Edward Zetlin Law would be happy to discuss. Please contact us at 703-379-0442 or e-mail at ed@zetlinlaw.com

Community Presentations: Edward Zetlin spoke in March before the Mt. Vernon Alzheimer's Support Group and the Autism Society of Northern Virginia Parent Support Group and will be speaking at Langston-Brown Senior Center on March 14 at 1:00 pm.

Contact us at (703)379-0442; ed@zetlinlaw.com


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