Pursuing Peace Of Mind For You And Your Family

How Your Financial Activities Over The Five Years Before You Apply For Medicaid May Affect Your Ability To Qualify

If you need to live in a long-term care facility or arrange for home-based long-term care, the exorbitant expenses of such care may lead you to apply for Medicaid. When government officials are deciding whether you qualify to receive elderly care or long-term care benefits through Medicaid, they will look back at and evaluate your assets to determine whether you do, in fact, need government assistance.

A key aspect of this review of your assets and financial activities before applying is known as the five-year look-back period. In addition to looking at what you own when you apply, officials will also review all your asset transfers over a five-year period preceding your application.

The “five-year look back” may have a significant impact on your ability to qualify for Medicaid. While no one has a crystal ball that can foretell the future, it is obviously in your best interests to discuss options long before you may need Medicaid to pay for long-term care. Contact our team at Horacio Sosa, P.A., to arrange for a review of your most promising Medical planning options, regardless of your stage in life.

What The Five-Year Look Back May Mean To You

As a result of a detailed assessment of your financial activity over the five-year period before you apply for Medicaid, the government agency that administers the Medicaid program may penalize you for assets that you:

  • Sold
  • Gave to family members
  • Donated to charity
  • Paid to caregivers without formal care contracts in place

The value of those assets will be added to the resources that you have at the time of application to help determine your eligibility. You may also be fined for not having reported those assets according to Medicaid requirements. There may be other unexpected complications and tax consequences regarding assets that you transferred during the five-year look-back period.

Will An Irrevocable Trust Help You Protect Assets And Preserve Medicaid Eligibility?

Many people try to prepare to qualify for Medicaid by setting up irrevocable trusts or “Medicaid-qualifying trusts.” The name sounds good, but if you put your assets into such a trust within five years before applying for benefits, it will not likely help you qualify for Medicaid. Instead, it may be considered a gift, possibly disqualifying you and resulting in penalties.

This general description of the five-year look back may not match your specific circumstances. For a personalized review of your finances, needs and options, contact us at Horacio Sosa, P.A., by calling 954-361-8966 or sending an email.