How to make gifts that will not make you ineligible for health care

by Mark A. Krohn, Esq.
Jacobowitz & Gubits, LLP

Certain gifts do not trigger the so-called “Medicaid Ineligibility Period.” For example, making a gift to your child who is permanently and totally disabled will not make you ineligible for Medicaid. Further, if one of your children has been living with you and taking care of you for at least two (2) years, a gift of your home to that child will not trigger the Medicaid Ineligibility Period.

Another example involves a sibling. There is no Medicaid Ineligibility Period if, prior to your moving into a long-term health-care facility, you and your sister or brother have been living in your home for more than a year and you sell your brother or sister a portion of your home and thereafter give him or her the balance.

This is based upon a special rule for transfers to a sibling where such sibling has an existing equity interest in the home. There is no time frame in connection with how long your brother or sister must have held an equity interest in your home, but rather the law provides that your brother or sister must live in your home for at least a year before you enter the facility.

Other types of gifts that can be made without triggering the Medicaid Ineligibility Period include, but are not limited to, the transfer of your interest in your home to your spouse or a dependent relative who lives in your home, and the transfer of property for a purpose other than to qualify for Medicaid, although you will likely be required to demonstrate why you made your transfer.

Assets that you should keep and not gift will normally include assets that are exempt under the Medicaid law. An example includes your furniture and personal effects or property used to create income, such as tools used in a woodworking trade.

Many other examples exist in connection with the gifting of property under the Medicaid rules. The laws concerning exempt transfers can be confusing, and since these laws are subject to amendment you should consult with an experienced elder-law attorney.