If a person has to go into a subsidized nursing home and has just gifted all of their savings to the children can the home get that money?

Answer 1

If the money has been gifted within a recent period of time (3 years??), there may be an effort to reclaim the money or deny her the subsidy.

There is a (5 year look back on gifting) that Medicaid guideline work with when looking at the assets of person applying for assistance.

The Deficit Reduction Act of 2005, which wasn't enacted until February 8, 2006, tightens Medicaid qualification requirements.Because Medicaid eligibility rules often are counter-intuitive and replete with traps for the unwary.

To qualify for Medicaid funded long term care, an individual must demonstrate medical needs and have minimal countable resources and income. Resource and income limits vary depending on living arrangements and care needs, but nearly all cash and assets available to fund food or shelter count. For instance, vacation homes, gifts, Social Security, and security deposits usually are countable.

Gifts are an obvious way to retain excess Medicaid countable resources within a family, but they can carry a heavy price. Gifts to loved ones may reduce excess countable resources, but they can trigger penalties.Nearly all gifts trigger penalties unless the gift is to or for a spouse, minor child, or disabled person or to a qualifying trust.

An individual temporarily is disqualified for Medicaid to fund long term care if the Medicaid applicant or her spouse makes non-exempt gifts within sixty months of applying for Medicaid. The disqualification period varies with the value gifted. While gifts outside the sixty month look back period don't trigger penalties at all.

When a donor does seek Medicaid within sixty months of making large gifts, the penalty period can be far greater than sixty months. Because the disqualification begins when the donor otherwise first would qualify for Medicaid, gifting that cause trigger for Medicaid application can prove to be extremely costly.

Gift planning requires expert guidance. Gifts must meet technical requirements to qualify for the exemptions. The simplest approach is to make gifts and then wait at least five years to apply for Medicaid.

Where an individual can't wait 60 months after making gifts to apply for Medicaid, the disqualification period generated by gifts won't begin until countable resources are reduced to the applicable Medicaid limits.

An individual who may need long term care can pay loved ones to provide care or other services. So long as the compensation is reasonable, no gift occurs, but there are tax consequences. For instance, a child can be compensated for managing the parent's care and finances or providing personal services such as laundry, meals, and transportation. However, the arrangement must be reasonable and covered by a contract.

Estate Attorneys have several ways to help families qualify for Medicaid without first dissipating all of their savings.

Answer 2

Yes, the nursing home can potentially seek reimbursement for the gifted funds from the children through legal means. These funds may be considered as assets that should have been used for the person's care, and could impact their eligibility for subsidized care. It is important to consult with a legal expert to understand the implications of this situation.