WHERE WILL YOU BE IN FIVE YEARS:
HOW TO BEAT THE MEDICAID LOOK-BACK PERIOD

By: BENJAMIN D. ECKMAN, ESQ.
Elder Law Attorney

     Throughout my educational career the question I repeatedly was asked was “Where will you be in five years?” Whether in high school, college, or law school, there was this emphasis to look forward and plan for the future. For nearly 20 years I have stressed to my clients and their families to do the same thing – look ahead and plan so you will beat the Medicaid look-back period.

     On February 8, 2006, former President Bush signed into law the Deficit Reduction Act of 2005. This law increased the look-back period to 60 months for all transfers. This means that the Medicaid case worker at the county board of social services can now examine all transactions that the Medicaid applicant may have made in the last five years.

     Under the old law, there was a two tiered look-back period. For transfers to or from certain trusts the look-back period was 60 months. For all other transfers, the look-back period was 36 months. The new legislation created a single look-back period of 60 months for all transfers.

     There are three primary ways to finance nursing home care in New Jersey: private pay, long-term care insurance, or Medicaid. Since insurance can’t be purchased once disabilities arise, many families rely on personal funds or Medicaid. The cost of a stay in a New Jersey nursing home easily exceeds $100,000.00 a year. Thus, many people turn to Medicaid to pay for their care. But you must play by their rules.

     Take for example two couples, each of whom gifted their respective houses to their children using a Medicaid trust. If the first couple applies after the 60 month period elapses, they will be eligible for Medicaid immediately. If the second couple applies before the 60 month period elapses, this could cause a very lengthy period of ineligibility, for which the family must find another source to pay for care.

     The rules relating to Medicaid are extremely complex. This new law places severe new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid to cover their nursing home or home care costs. Innocent gifts to grandchildren, donations to a church or synagogue, birthday or anniversary gifts could, years later, result in extended periods without any long-term care coverage.

     It is therefore essential that professional legal assistance be obtained before any Medicaid gifting plan is implemented or Medicaid application is filed. The Law Firm of Benjamin D. Eckman can help with this. Please contact us to assist with all your Estate Planning, Estate Administration and Elder Law needs.

Benjamin D. Eckman, Esq. concentrates his practice on Elder Law & Estate Planning. Elder law is intended to broadly assist “extended living”. An elder law practitioner provides the legal information necessary for persons whose lives will extend or have already extended beyond the time when all children are usually out of the house and when regular employment ceases. After the elder law attorney and client complete their work, legal documents have been drafted, tax considerations have been analyzed, and a plan to protect the elder’s estate has been implemented.

Benjamin D. Eckman’s practice focuses on Estate Planning & Elder Law – legal issues facing senior citizens. Benjamin D. Eckman received his Bachelor’s Degree in Business/Accounting from Touro College and his law degree from Seton Hall University School of Law. He is a member of the New York State Bar Association, the New Jersey State Bar Association, the National Academy of Elder Law Attorneys, the Elder Law Section and Real Property, Probate and Trust Section of the New Jersey State Bar Association, the Union County Bar Association, Passaic County Bar Association and the Bergen County Bar Association. He can be reached at (973) 709-0909, (908) 206-1000 or (201) 263-9161.