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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.

Local Elder Law Attorneys in Ashburn, VA

Loretta Williams

Hale Ball Carlson Baumgartner Murphy PLC
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Evan Farr

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For more on promissory notes and Medicaid, click here.

Last Modified: 02/24/2015

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