Ensure You Remain Eligible for Medicaid This Holiday Season

‘Tis the season for giving! We have all heard that giving is better than receiving, but there are some important things to consider before transferring any money or assets to others. Be sure you are up-to-date on Medicaid rules when it comes to gifting, as some gifts could impact your Medicaid eligibility.

If you are thinking of applying for Medicaid, transferring too much money can interfere with your eligibility.  The federal gift tax exemption allows individuals to gift up to $15,000 a year without having to pay a gift tax, however, for Medicaid purposes gifting that amount is considered to be a transfer. If you transfer certain assets within five years before applying for Medicaid, you will be considered ineligible for some time. This period is known as a transfer penalty and its length depends on how much money you transferred.

Certain transfers are exempt from the transfer penalty. You may transfer any asset to your spouse or a trust for the sole benefit of your child who is permanently disabled or blind.  The allowable annual gifts are one of the biggest areas of confusion. In Indiana, a ‘de minimis gift’ of $1,200.00 may be gifted and this amount is excluded from the Medicaid transfer penalty. However, in Ohio, there is no de minimis gift allowance permitted and all gifting is counted for Medicaid purposes.

There are many rules and regulations it is important to be aware of when applying for Medicaid.  The Medicaid eligibility criteria and evaluation processes are such that professional assistance may be very beneficial to you. If you are planning to give or transfer money or assets to others this season, always discuss your plans with an experienced elder law attorney in advance. Speak with a professional today to ensure you can have a happy giving season and avoid any gift tax or Medicaid problems down the road.

If you still have questions or are unsure of anything related to Medicaid rules, don’t hesitate to contact Koler Law Office for a complimentary consultation.