TO GIVE OR NOT TO GIVE: HOW DOES MEDICAID ANSWER THIS QUESTION

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

To give or not to give, how does Medicaid answer this question. For sure gifting is a good thing? Winston Churchill once said “We make a living by what we get, but we make a life by what we give.” This maxim is almost always true except in the Medicaid context. Last month’s blog discussed the five year look back period for Medicaid. The case worker at the county board of social services can now examine all transactions made by the Medicaid applicant during the last five years. If no gifts were made within that period and the applicant meets all other criteria, he or she will qualify for Medicaid. If, however, it was determined that the applicant transferred assets either to qualify for Medicaid or by simply gifting money to pay for a child’s wedding or to pay tuition, Medicaid will assess a period of ineligibility, known as the penalty period.
Let’s suppose three years ago mother gifted daughter $20,000 to help with a down payment for a house. Mom unexpectedly suffers a stroke and now needs full time nursing home care. When the Medicaid application is filed, this $20,000 gift must be reported. Effective April 1, 2014, New Jersey calculates the penalty period by dividing the $20,000 gift by the divestment penalty divisor of $313.50 per day. The effect of this gift is that mother is ineligible for Medicaid for the duration of the penalty period, or 63 days. Now you know how Medicaid answer the question, to give or not to give?

The rules relating to the Medicaid are extremely complex. 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) 224-4357 or (201) 263-9161.