| What is all the fuss about the five-year look-back?
CLIENT QUESTION:
Question regarding the five-year look-back: When does the five-year look-back start and end? Say you opened the trust in 2010, and you put monies in the trust that were in a bank account in 2010. If you had to go into a nursing home now, would the five-year look-back be for the time frame now, 2023 going back five years to 2018, or would the five-year look-back look at 2010 to 2015? If the answer is now, 2023 to 2018, would Medicaid even look at any activity of the monies that were in the trust from the start in 2010 to 2018? Also, if the answer is now back five years would you need to save all statements since the trust was opened or only the past five years?
MY RESPONSE:
The current five-year look-back is what I call the “Medicaid doesn’t trust you law.” Medicaid doesn’t really believe that you are poor. Remember that Medicaid is a welfare program for the poor and Medicaid figures that you
gave away your assets yesterday and are claiming that you are poor today.
To uncover this perceived abuse, Medicaid wants to AUDIT your books for
the 5 years preceding your being in a nursing home and applying for Medicaid. They would love to go back to the beginning of time to conduct
their audit, but alas, the law says they can only go back 5 years. They can
ask about transfers prior to 5 years ago but any such old transfers would
cause no Medicaid penalty (and by the way…they don’t ask).
So the bottom line is that if you are in a nursing home in 2023, the 5-year
look-back will only require you to provide extensive information for the last
five years, that is back to 2018. Statements further back than 5 years will
not have to be provided and will cause no penalties.
Applying for Medicaid and providing the 5 years of information is like
going through an IRS audit. There is a ton of work to provide all the documentation. We do all this work for our clients. |
