Medicaid is a needs-based program, which in Georgia, requires the recipient to prove they financially require assistance with income and asset limits. See more about those requirements here. Most people have more income and assets than the limits, but not enough to see them through the full term of care they will need and they give assets away to qualify. Because Medicaid has a 5 year (or 60 months) look back period, any gifts made will be counted against the applicant. Gifting, however, is not against the law, and being penalized for making these gifts and transfers is still a good idea in some scenarios. Gifting and transfers only become illegal when the applicant fails to disclose the gift or transfer on their application.
The penalty period is calculated by taking the amount gifted or transferred and comparing it to the cost of a month of nursing home costs. As an example, if Mom gives her son $24,700 in order to qualify for Medicaid and Georgia’s average monthly cost is $6,175 (as of 2019), a penalty period of four months is created by the gift. As a result, Mom or her son will need to cover the actual costs of her care during the penalty period.
Aside from a Medicaid recipient gifting money, they may receive gifts without automatically being disqualified. So long as Mom’s income and asset amounts are under the limit amounts, she may receive gifts of cash or services without penalty.
Joint accounts are also treated differently under Medicaid. In 2009, Mom added her son and daughter to her investment account. By 2021, that account has grown substantially and Mom needs to go to a nursing home. While some would argue that only 1/3 of the amount of the investment account should be included on the application because her son and daughter on the account as well, when applying for Medicaid, Mom should report the full amount because Mom was the sole contributor to the account and the money should be counted, in full, as hers for Medicaid application purposes. Additionally, in Georgia, the total value of all accounts with the applicant’s name on them are assumed to belong to the applicant. To overcome this presumption the account holders would need to provide clear evidence that all of a portion of the account is in fact theirs by showing contributions to the account.
Planning to apply for Medicaid can be a complex process. The ratio of income to assets, the limit amounts, gifting allowances, homes, and appropriate spend down measures all must work in tandem to provide the best scenario which allows someone to apply and qualify for Medicaid without imposing such restrictions too early. At Grissom Law, we look at each client’s situation to determine which planning techniques provide the best advantage to Medicaid applicants and their families. Call 678-781-9230 to schedule a consultation to review your options.
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This Blog/Web Site is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this blog site you understand that there is no attorney client relationship between you and Grissom Law, LLC.