In the event that you or your spouse are facing a long-term care crisis and are concerned about spending down your assets quickly in order to qualify for Medicaid, it’s important to be aware of some of the potential pitfalls of acting too fast without carefully considering your options.
Individuals who are not familiar with the Medicaid qualification process might think that it’s a safe bet to pass on assets to children in order to reduce the volume of assets linked to the individuals attempting to qualify. Passing on these assets to children may be done with good intentions, but it can actually do more harm than good if you’re not careful.
One of the disadvantages associated with transferring these assets is that doing so gives you no control over them in the future. Imagine a scenario where the child is sued and all of the assets are taken. Although this can be disheartening to think about, it’s also important to consider that giving away too many assets in an attempt to qualify for Medicaid can actually trigger a penalty. Medicaid looks back at gifts over the previous five years to determine if an individual has attempted to disperse assets in order to qualify for the government program. Since Medicaid is geared towards low-income individuals, if it is found that you transferred assets too aggressively in an attempt to qualify, a penalty may be calculated to determine the amount of nursing home care that could have been paid for with that gift. The applicant will be ineligible for Medicaid during a particular period if this is determined.
While Medicaid is a critical program for most individuals facing a long-term care crisis, you need to apply for it and prepare for it under the guidance of an experienced elder law professional. Don’t take any actions until you’ve consulted with an expert- email us at email@example.com