Many seniors have heard that giving assets to one’s children is a way to safeguard those assets so that they will pass on to the younger generation upon the senior’s death even if nursing home care is required. However, the law governing Medicaid has changed and it now appears that Medicaid will not be available to those who make such gifts.
Nevertheless, while the strategy of making gifts to children in anticipation of requiring nursing home care is much more complex under the new law, it still may be possible for you to preserve assets in this manner.
Some gifts will not cause Medicaid ineligibility in any event. You are allowed to give any amount of your assets to your spouse, for example. And gifts to a disabled child likewise are not considered transfers that cause Medicaid ineligibility. Moreover, if one waits long enough after making a large gift before applying for Medicaid, the gift will be ignored.
Finally, even though the Medicaid program now will wait until one is in a nursing home and out of money before refusing to grant benefits (because under the new law the penalty period does not begin to run until there is no other money left to pay for care), clever asset preservation planners have devised a strategy that allows the family to preserve the same amount of assets that they could have preserved before the rules changed.
Now more than ever it is important to have good professional counsel if you anticipate that you or a loved will need nursing home care.
For a discussion of the Medicaid rule changes, including those affecting asset transfers, see our October 7 article: Maryland Changes its Medicaid Rules.