If you are looking to get Medicaid, you may be feeling worried about if you qualify. This is what you need to know about transfer of assets.
Any asset transferred for the purpose of qualifying for Medicaid is considered an impermissible transfer of assets for which a penalty is imposed. Any transfer of assets for which the transferer does not receive “fair market value” is considered a transfer for the purpose of qualifying for Medicaid unless it can be proven that the transfer was made for another purpose.
Any transfer or sale of an asset for which the applicant receives the fair market value, no penalty period will be imposed.
For transfers mad exclusively for some purpose other than qualifying for Medicaid, no penalty period will be imposed. An example of this type of transfer would be to repay an outstanding debt, or as a gift for a specific purpose, or a gift as part of a long-established pattern of gift-giving.
A period of ineligibility (“penalty period”) will be imposed for any transfers of assets which do not meet the above criteria. A period of ineligibility for Medicaid institutional services will result from these transfers. Medicaid will calculate the period of ineligibility by the following statutory formula: the dollar value of the transfer divided by the average monthly cost for one month of nursing home care equals the number of months of ineligibility for Medicaid institutional services. The average monthly cost of care for New York is currently $10,556.
For example, if Mr. Smith gives $105,560 to his son as a gift, Medicaid will calculate the period of ineligibility by dividing the gift amount by the average monthly cost of nursing home care ($10,556) to equal the number of months of penalty: $105,560/ = 10 months.
There is a 60-month look-back period for all transfers of assets. For transfers made on or after February 8, 2006, the penalty period starts on the first day of the month after which assets have been transferred for less than fair market value, or the first day of the month the institutionalized individual is receiving nursing facility services for which Medicaid would be available, which is later.
Any transfer of assets between spouses incurs no penalty period. However, any transfer by either spouse to a third party will create period of ineligibility for the institutionalized spouse, subject to the transfer rules stated above.
If you have any further questions about transfer of assets rules, please call our Buffalo Medicaid lawyers today.