K. Gabriel Heiser
Attorney, author, Medicaid asset protection planning
K. Gabriel Heiser, J.D., is an attorney with over 25 years of experience in elder law and estate planning. He is the author of "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets," an annually updated practical guide for the layperson.
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Can someone explain what the 5-year "look back" period for Medicaid is?
You are correct that purchasing things for yourself or your house is not considered a gift that can cause a penalty for Medicaid purposes.... You are correct that purchasing things for yourself or your house is not considered a gift that can cause a penalty for Medicaid purposes. However, virtually all other gifts will indeed cause a penalty period; there is no de minimis rule for Medicaid purposes, so even small gifts can be counted if the person making the gift applies for Medicaid within 5 years. see more
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Can someone explain what the 5-year "look back" period for Medicaid is?
If you transfer the ownership of the policy, it will be deemed a gift/transfer of the value of the policy on that date, which is roughly... If you transfer the ownership of the policy, it will be deemed a gift/transfer of the value of the policy on that date, which is roughly the cash surrender value. If you then apply for Medicaid within 5 years, that gift will cause a penalty period. see more
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Can someone explain what the 5-year "look back" period for Medicaid is?
Because she still is an owner of the bonds, the value of the bonds will be counted as her assets in determining if she has more than $2,000... Because she still is an owner of the bonds, the value of the bonds will be counted as her assets in determining if she has more than $2,000 (the maximum amount she is permitted to have and still qualify for Medicaid). Because she never gave the bonds to her children, she never made any gifts, so the five-year lookback period does not apply. see more
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Can someone explain what the 5-year "look back" period for Medicaid is?
Hi: Yes, new editions come out each year. We are up to the 2012 edition, now! The exceptions to the transfer penalties are found in the... Hi: Yes, new editions come out each year. We are up to the 2012 edition, now! The exceptions to the transfer penalties are found in the chapter entitled "Transfer (Gift) Strategies" (on p. 175). see more
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Can someone explain what the 5-year "look back" period for Medicaid is?
There is an exception to the transfer penalty rules for a transfer directly to a disabled child (of any age) or to an irrevocable trust for... There is an exception to the transfer penalty rules for a transfer directly to a disabled child (of any age) or to an irrevocable trust for their benefit. I am glad you brought that up! These and other exceptions to the transfer rules are covered extensively in a chapter in my book, available at www.MedicaidSecrets.com. It really helps to be armed with the rules and exceptions. to help with your Medicaid planning! see more
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Can someone explain what the 5-year "look back" period for Medicaid is?
When a person applies for Medicaid for nursing home coverage, the form asks if you have made any gifts or transfers within the prior 5... When a person applies for Medicaid for nursing home coverage, the form asks if you have made any gifts or transfers within the prior 5 years. That's considered the "5-year lookback period." If the answer is Yes, then you must list all items gifted during that period, and list the value of the item (if other than cash). Every gift made within the prior 5 years is then added up and the total amount is then divided by the average cost of a nursing home in your region (usually the entire state has one region, but some states have different geographic regions for these purposes). So, for example, if the total amount of gifts equal $50,000, and the average cost of a nursing home in your region is $5,000 (this number is determined by the state government), then there is a 10-month penalty period: $50,000 divided by $5,000 = 10 months. What that means is Medicaid will not cover you until that 10-month penalty period has passed. Note that the penalty period does not start until (i) you actually apply for Medicaid and (ii) you would have qualified for Medicaid benefits BUT FOR the gifts made during the prior 5-year period. Hope that helps!! I go into great detail with more examples in my book, "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets". see more
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Can someone explain what the 5-year "look back" period for Medicaid is?
The only way to avoid the imposition of a penalty when a person makes a gift within the 5 year period before applying for Medicaid is if... The only way to avoid the imposition of a penalty when a person makes a gift within the 5 year period before applying for Medicaid is if the gift is returned promptly. Since the promise to pay your loans is not enforceable, such payment would be considered a gift, and therefore subject to the 5-year lookback period. If your father wrote a check to the bank that relieved your legal obligation, it would still be deemed a gift to you, since you would be the one benefiting from such check. In order to reverse the gift, you would not pay the state the money, you would have to pay your father the money. If he had already given it to the bank, that would cause a major problem, since you wouldn't have the money to give back to him! If I were you, I would explore other options at this point, such as a personal services contract. You may want to consider hiring an elder law attorney who specializes in Medicaid planning. see more
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Is having Dementia enough to qualify for Medicaid/Medicare assistance to pay for nursing home care?
In order to qualify for Medicaid, your mother would have to have "countable" assets in excess of $2,000. If she can qualify, then... In order to qualify for Medicaid, your mother would have to have "countable" assets in excess of $2,000. If she can qualify, then your mother would still pay her Social Security and pension to the nursing home, but the Medicaid program would pay the nursing home the balance of the bill for your mother's care. see more
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Can my mother get Medicare and Medicaid at the same time?
Medicare, being solely a federal program, has the same rules in all 50 states. Thus, a move from one state to another will not affect... Medicare, being solely a federal program, has the same rules in all 50 states. Thus, a move from one state to another will not affect Medicare coverage of the person who moves.
On the other hand, Medicaid has different rules in each of the 50 states, since Medicaid is a joint federal/state program. While certain of the Medicaid rules are the same in all states, there are many areas of the Medicaid program where the states differ.
As a result, it is possible--though not likely--that a person who qualifies for Medicaid in one state may be disqualified in a state they move to, because the rules in the two states differ. In your case, since the California Medi-Cal laws are more lenient than the other 49 states, I would expect that your dad's Medicaid/Medi-Cal coverage will continue unaffected. And yes, he will need to re-apply once he moves there. see more
On the other hand, Medicaid has different rules in each of the 50 states, since Medicaid is a joint federal/state program. While certain of the Medicaid rules are the same in all states, there are many areas of the Medicaid program where the states differ.
As a result, it is possible--though not likely--that a person who qualifies for Medicaid in one state may be disqualified in a state they move to, because the rules in the two states differ. In your case, since the California Medi-Cal laws are more lenient than the other 49 states, I would expect that your dad's Medicaid/Medi-Cal coverage will continue unaffected. And yes, he will need to re-apply once he moves there. see more
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My husband and I want to build an in-law suite in my home. What are the future financial ramifications to my p...
I have had clients that did something quite similar to your plan. The key is for your parents not to overpay you for their interest in your... I have had clients that did something quite similar to your plan. The key is for your parents not to overpay you for their interest in your house. If the in-law suite is really only valued at $100,000, but they pay you $150,000, they have just made a $50,000 gift to you and your husband, which can cause a certain period of disqualification from receiving Medicaid should either of your parents need to apply for Medicaid within the next 5 years.
It may be possible for your parents to purchase a greater interest in the house, so that they can shelter more of their money. This would be a type of joint interest. This can require a complicated calculation to set the interests of the parties in the deed, which the attorney will have to do.
You also need to plan for what happens to their interest in the house after their deaths. In many states, so long as a jointly owned residence passes by law automatically to the surviving joint owners (i.e., avoids probate), the state cannot make a claim against it after the deceased joint owner dies, to recoup the state's Medicaid payments. Other states allow such recoupment against the property even after the death of the Medicaid recipient/former joint owner. I believe that Connecticut may have very recently changed its laws to expand its "estate recovery" laws to permit this, so you will certainly want to check this out with your elder law attorney.
Since you said you plan to provide care to your parents, you should also ask your attorney about the possibility of him/her drawing up a Personal Care Agreement. Some states permit an advance payment for lifetime care, others limit payments only to ongoing care (i.e., must bill monthly). The advantage of such a contract, in either case, is that it permits your parents to transfer money to you without it being deemed a penalty-causing gift. Of course, their payments to you would be taxable income, so be sure to check with your accountant about the various reporting requirements for this.
P.S.--In the answer above by Carol, I believe she meant the "Medicaid"--not "Medicare"--laws, since Medicare does not look at one's financial means to pay but Medicaid does. see more
It may be possible for your parents to purchase a greater interest in the house, so that they can shelter more of their money. This would be a type of joint interest. This can require a complicated calculation to set the interests of the parties in the deed, which the attorney will have to do.
You also need to plan for what happens to their interest in the house after their deaths. In many states, so long as a jointly owned residence passes by law automatically to the surviving joint owners (i.e., avoids probate), the state cannot make a claim against it after the deceased joint owner dies, to recoup the state's Medicaid payments. Other states allow such recoupment against the property even after the death of the Medicaid recipient/former joint owner. I believe that Connecticut may have very recently changed its laws to expand its "estate recovery" laws to permit this, so you will certainly want to check this out with your elder law attorney.
Since you said you plan to provide care to your parents, you should also ask your attorney about the possibility of him/her drawing up a Personal Care Agreement. Some states permit an advance payment for lifetime care, others limit payments only to ongoing care (i.e., must bill monthly). The advantage of such a contract, in either case, is that it permits your parents to transfer money to you without it being deemed a penalty-causing gift. Of course, their payments to you would be taxable income, so be sure to check with your accountant about the various reporting requirements for this.
P.S.--In the answer above by Carol, I believe she meant the "Medicaid"--not "Medicare"--laws, since Medicare does not look at one's financial means to pay but Medicaid does. see more
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Can someone explain what the 5-year "look back" period for Medicaid is?
The question isn't whether the income is counted. It's counted in ALL states--as income. Thus the owner of the real estate must... The question isn't whether the income is counted. It's counted in ALL states--as income. Thus the owner of the real estate must include the net income as part of their countable income for Medicaid eligibility purposes.
What does vary from state to state is the treatment of the underlying real estate itself, whether it is a countable asset or not. Some states exclude it, some don't.
As for NY state, I'm not a NY attorney and cannot answer that question. Maybe a NY lawyer can post the answer here or you can do some further research on your own. Sorry about that. see more
What does vary from state to state is the treatment of the underlying real estate itself, whether it is a countable asset or not. Some states exclude it, some don't.
As for NY state, I'm not a NY attorney and cannot answer that question. Maybe a NY lawyer can post the answer here or you can do some further research on your own. Sorry about that. see more
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Can someone explain what the 5-year "look back" period for Medicaid is?
Some states exempt income-producing property such as rental real estate and will exclude it when calculating the assets of the individual... Some states exempt income-producing property such as rental real estate and will exclude it when calculating the assets of the individual applying for Medicaid. However, many states do not have that exemption. Once again, you need to find out the rule in your state before doing your planning! see more
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Can someone explain what the 5-year "look back" period for Medicaid is?
Although there is an exception for gifts made to pay for medical care under the federal gift tax laws, there is no similar exception under... Although there is an exception for gifts made to pay for medical care under the federal gift tax laws, there is no similar exception under the Medicaid rules. Unfortunately, the gift will be deemed a penalty-causing transfer unless you can prove that such gift was "exclusively made for a purpose other than to qualify for Medicaid." If you can back that up, and the caseworker agrees, then it will not cause a penalty, even though it was made within the 5-year lookback period. see more
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My mother doesn't qualify for Medicaid. How can we get help for her care?
If your mother's name is not on the house you live in, that is a good situation. Otherwise, the state would have to make a claim... If your mother's name is not on the house you live in, that is a good situation. Otherwise, the state would have to make a claim against her house following her death, to recoup all its Medicaid payments it made on her behalf.
As far as the bank accounts, a joint account is viewed as being owned 100% by the Medicaid applicant except to the extent you can prove the funds originated from someone other than the applicant. So in your case, you should be prepared to show where the money in the joint account came from.
If purchases were made with your mother's credit cards for her own benefit, that is not a problem. If the purchases were for the benefit of someone else, they can be deemed to be gifts from your mother. As such, any gifts made within 5 years of her application for Medicaid could result in a penalty period. see more
As far as the bank accounts, a joint account is viewed as being owned 100% by the Medicaid applicant except to the extent you can prove the funds originated from someone other than the applicant. So in your case, you should be prepared to show where the money in the joint account came from.
If purchases were made with your mother's credit cards for her own benefit, that is not a problem. If the purchases were for the benefit of someone else, they can be deemed to be gifts from your mother. As such, any gifts made within 5 years of her application for Medicaid could result in a penalty period. see more
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Can Medicaid take your parent's home to pay for nursing care if the caregiver is joint owner?
If a person who owns a home is receiving Medicaid, then upon the death of the person the state can indeed require the house to be sold in... If a person who owns a home is receiving Medicaid, then upon the death of the person the state can indeed require the house to be sold in order to pay back the state, up to the amount the state actually paid out in Medicaid benefits during the person's life.
A living trust would offer no benefit to protect the house. In fact, in most states, if a house is held in a living trust, it loses its exempt status, which could cause the owner NOT to qualify for Medicaid! see more
A living trust would offer no benefit to protect the house. In fact, in most states, if a house is held in a living trust, it loses its exempt status, which could cause the owner NOT to qualify for Medicaid! see more
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Is anyone familiar with the Medicaid Asset Protection Plan, MAPP?
Information is power. I assisted clients with their estate and Medicaid planning for 25 years, as an elder law attorney. I wanted to help... Information is power. I assisted clients with their estate and Medicaid planning for 25 years, as an elder law attorney. I wanted to help more than just a few clients so I wrote a book that clearly explains all the Medicaid rules, what you can and should NOT do, the loopholes only the high-priced attorneys know, and how to find a good attorney to assist you. The book is called "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets" (www.MedicaidSecrets.com) and is very highly reviewed on Amazon.com. The government will NOT give you good advice; would you go to the IRS for tax planning? Arm yourself with the rules and techniques so you avoid costly mistakes and take full advantage of the laws for your own benefit. See my interview on the John Stossel show on Fox-TV; it's fun! Thanks and good luck!! see more
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Can someone explain what the 5-year "look back" period for Medicaid is?
The rule is this: If a "caretaker child" lives with a parent and takes care of a parent for at least two years immediately... The rule is this: If a "caretaker child" lives with a parent and takes care of a parent for at least two years immediately preceding the parent's entering a nursing home, and because of such care the parent is able to delay entering the nursing home, then the parent can gift the house to the child without incurring a penalty for Medicaid purposes. Note that you will need to document the care that you give your mother and the fact that BUT FOR such care, she would have needed to move into a nursing home. You will need a doctor's letter to this effect, too.
The timing requires that you live with her for at least two years, she moves into the nursing home, she transfers the house to you. see more
The timing requires that you live with her for at least two years, she moves into the nursing home, she transfers the house to you. see more
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Can Medicaid take your parent's home to pay for nursing care if the caregiver is joint owner?
I think you mean "Medicaid" not "Medicare," since Medicare only covers nursing home care for a maximum of 100 days, and... I think you mean "Medicaid" not "Medicare," since Medicare only covers nursing home care for a maximum of 100 days, and there is no payback to them like there is to Medicaid. If the house is in your name then the state cannot attach it or make a claim against it following your father's death. Also, if the transfer to your name took place more than 5 years ago, then it cannot count against your father if he needs to apply for Medicaid at this point in time. see more
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Can someone explain what the 5-year "look back" period for Medicaid is?
Some elder law attorneys charge for their advice by the hour, and can generally give you an estimated charge up front. Other attorneys will... Some elder law attorneys charge for their advice by the hour, and can generally give you an estimated charge up front. Other attorneys will charge a flat fee and also tell you that amount up front. In all cases be sure to get a written fee agreement to avoid any misunderstandings! Because every person's situation is unique, there is no one-size-fits-all Medicaid plan for everyone. Accordingly, every plan is customized for that particular client, making it more expensive. see more
Can someone explain what the 5-year "look back" period for Medicaid is?