Gifting Assets & Qualifying for Medicaid
Medicaid (Title 19 in Connecticut) provides care in a nursing home for those who have limited income and few assets. It will pay for nursing facility care and some very limited home care. Following are some of the rules and criteria that must be met in order to quality for Medicaid benefits:
In order to be eligible for Medicaid benefits, the nursing home resident must spend down to $1,600 in “countable” assets. Countable assests include cash, bank accounts, stocks, bonds, IRA’s, 401k’s etc.
The spouse of a nursing-home resident, the “community spouse”, is limited to one half of the couple’s total assets up to a maximum of $119,220 (Effective January 1, 2015). This figure changes each year to reflect inflation. In addition, the community spouse may keep the primary residence, a car, and some personal items.
For a single person, social security and pension income must generally be used to pay the costs of long term care. You are allowed to keep a “personal-needs allowance” which averages approximately $60 per month.
If there is a “community spouse” at home, the law provides for a minimum amount of total monthly income. In 2015, this generally ranges between $1,891 and $2,931 per month.
Gifting Assets to Qualify for Medicaid
Many people attempt to protect assets and ultimately qualify for Medicaid by giving their assets away. When applying for Medicaid, the federal government requires a “look back” period to see if you have transferred your assets for less than fair market value (i.e. to children or others). Medicaid can “look back” 60 months from your application for all gifts, including transfers made to or from certain kinds of trusts. This can result in Medicaid benefits being denied or delayed.
Federal Law requires States to recover any monies paid by Medicaid upon the death of the surviving spouse.