| Congratulations to all the graduates…..read on:
READER QUESTION:
We had an irrevocable Medicaid trust established at your firm in May of 2021. When my grandchildren graduated high school and college we gave each $1,000 gifts. Will that create another five-year look back?
MY RESPONSE:
All gifts made within 5 years of applying for Medicaid are caught in the look-back, including graduation presents. However…
Firstly, we would argue that this is a gift that had nothing to do with Medicaid planning and therefore exempt. While this would be true, Medicaid may not care and the legal costs of convincing them may not be worth it.
Secondly, we usually do not worry about this type of gift because Medicaid usually only asks us to inform them of gifts that exceed $2000 – 3,000 and therefore under the radar. On the other hand, they could ask for this information.
But, thirdly, if these small gifts are caught in the look-back, it is not that you are not eligible for 5 years, you are simply assessed a penalty of one month of ineligibility for Medicaid for about every $15,000 transferred within the look-back. Any penalty then would likely be small or perhaps insignificant. |
