Because Medicaid is means-tested and has limits on resources, there are concerns that people who are trying to qualify for Medicaid will just give away their money and property right before they go into a nursing home and need costly care. To discourage this, a five-year look back rule is in place.
The five-year look back rule looks back at transactions within the five years from the time that you need Medicaid benefits. If you made a transfer of money or property as a gift or sold money or property for much less than it was valued at, this could temporarily disqualify you from coverage. The length of the disqualification is determined by the value of transferred assets divided by average nursing home care costs in your area. The larger the value of the transferred assets, the longer the suspension.
The Medicaid planning process does involve the transfer of assets in most situations, which means that it is far better for you to talk with Nirenstein, Horowitz & Associates and begin this process as early as you can. Don’t wait until your need for nursing home care is imminent, as it may be too late at that point to successfully shield all of you assets. Even if you do need care soon, though, it is still a good idea to talk to a lawyer and see how much of your wealth you actually can protect.
Latest posts by Barry D. Horowitz, Estate Planning Attorney (see all)
- Can a Home Be Purchased with a Special Needs Trust? - January 21, 2020
- How to Incorporate a Domestic Asset Protection Trust into Your Estate Plan - January 16, 2020
- How Long Does It Take to Probate an Estate in Connecticut? - January 14, 2020