Will Tuition Gifts to Grandson Need to Be Repaid in Order to Qualify for Medicaid?
My father gave his grandson, my son, a total of $20,000 for college tuition over the last four years. Will this money need to...
Read moreWe’ve all heard that it’s better to give than to receive, but if you think you might someday want to apply for Medicaid long-term care benefits, you need to be careful because giving away money or property can interfere with your eligibility.
Under federal Medicaid law, if you transfer certain assets within five years before applying for Medicaid, you will be ineligible for a period of time (called a transfer penalty), depending on how much money you transferred. Even small transfers can affect eligibility. While federal law allows individuals to gift up to $14,000 a year (in 2016) without having to pay a gift tax, Medicaid law still treats that gift as a transfer.
Local Elder Law Attorneys in Ashburn, VA
John Laster is a lawyer licensed to practice in Virginia, Maryland and the District of Columbia. He limits his practice to wealth transfer planning, trusts, wills, powers of attorney, health care decision-making issues, estate administration and related tax, elder law and disability concerns. Listed in The Best Lawyers...
Loretta Morris Williams is a certified elder law attorney by the National Elder Law Foundation. Ms. Williams was admitted to the Council of Advanced Practitioners, National Academy of Elder Law Attorneys (NAELA) in 2012. She serves as President of the Virginia Academy of Elder Law Attorneys. Ms. Willia...
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...
Any transfer that you make, however innocent, will come under scrutiny. For example, Medicaid does not have an exception for gifts to charities. If you give money to a charity, it could affect your Medicaid eligibility down the road. Similarly, gifts for holidays, weddings, birthdays, and graduations can all cause a transfer penalty. If you buy something for a friend or relative, this could also result in a transfer penalty.
Spending a lot of cash all at once or over time could prompt the state to request documentation showing how the money was spent. If you don't have documentation showing that you received fair market value in return for a transferred asset, you could be subject to a transfer penalty.
While most transfers are penalized, certain transfers are exempt from this penalty. Even after entering a nursing home, you may transfer any asset to the following individuals without having to wait out a period of Medicaid ineligibility:
In addition, you may transfer your home to the following individuals (as well as to those listed above):
Before giving away assets or property, check with your elder law attorney to ensure that it won't affect your Medicaid eligibility.
For more information on Medicaid’s transfer rules, click here.
For more on the gift tax rules, click here.
My father gave his grandson, my son, a total of $20,000 for college tuition over the last four years. Will this money need to...
Read moreMy uncle has no children of his own, only three nieces. He is considering gifting each of us $14,000, the maximum amount ...
Read moreFor many Medicaid applicants, individual retirement accounts (IRAs) are one of their biggest assets.
Read moreLearn More