Over on the ElderCounsel Blog, Jill Roamer has written an article that ought to serve as a stern warning to families who are considering giving away randomly as a means of putting a loved on in a position where he or she can qualify for Medicaid. Although she mostly discusses a Pennsylvania case in the process, the principles are applicable no matter what state you live in, including Texas, where I practice.
Under Medicaid guidelines, all persons who qualify to receive long-term care must have assets that are below a set limit. Right now, the limit is $2,000. Some family members, deciding that it is necessary to get a loved one below the limit, will encourage the patient to give away assets as a means of getting below the asset limit. This can be a huge mistake, resulting in something known as a "penalty period" in which the loved one must wait a lengthy period of time to qualify before they can secure benefits.
Having said that, in most cases, it is not necessary to simply exhaust your life savings on long-term care until you reach the point where you can qualify. In truth, there are some strategies for qualifying for Medicaid that use gifting, but you should never trigger a penalty period for yourself or a loved one who is attempting to qualify for Medicaid without first having a plan in place for taking care of the loved ones cost of care during the entire penalty period.
If you have any questions about best to dispose of any excess assets that keep you or a loved one from qualifying for Medicaid, it is best to consult an attorney with training and experience in long-term care applications. If they are like me, they will not charge you for an initial consultation. Instead, the initial consultation can serve as an opportunity to determine whether it would be more cost-effective to use his or her services.