Can My Father Repay a Loan Without Affecting His Medicaid Application?
February 24th, 2015
My father is in a nursing home and I am starting the Medicaid application process. My sister lent him about $19,000 to help him out of a financial situation prior to 2007. She has documentation to support the loan. Can I repay her from his assets during the Medicaid process or is that considered a gift that would affect his eligibility? He has $20,000 in liquid assets after the funeral benefit, and the nursing home wants him to private pay $16,000. I would rather repay my sister for the loan before the nursing home gets their piece. Can I do this?
This really depends on the actual documentation and the practice in your state. If by documentation you mean a promissory note, repayment should work. But if it’s simply documentation that the money came from your sister, it probably won’t. To be certain you would really have to consult with a local elder law attorney. The other option would be to reimburse your sister, making sure that she understands that if it doesn’t work she’ll have to return the money to your father.
For more about Medicaid's asset transfer rules, click here.
Daniel N. Steven is an attorney licensed in Maryland and the District of Columbia. with many years of experience in complex estate planning and Elder Law. He is rated by Martindale-Hubbell as an AV Preeminent 5.0 out of 5 rated attorney.
Margaret A. O’Reilly is an estate planning and elder law attorney with over thirty-five years of legal experience. Attorney O’Reilly graduated from Duke University with a degree in psychology, and received her law degree from Northeastern University School of Law in Boston, Massachusetts. For over 15 y...
Bill founded The Estate Planning & Elder Law Firm, P.C. in 1994. Bill limits his practice to the areas of estate planning and administration, incapacity planning, Medicaid, asset protection planning, and elder law. He is one of (15) fifteen attorneys practicing in Virginia, Maryland and the District of Columbia, ce...