Can someone explain what the 5-year "look back" period for Medicaid is?

3 Comments

Q: The more I read about Medicaid, the more confused I get. Can someone explain how the 5-year "look back" period for Medicaid is related to the $14,000 gift exemption?

A: I am an attorney with 25 years' experience doing Medicaid planning. Let me clear up a few items discussed above:

  1. The $14,000 gift exemption: This figure relates solely to a Federal GIFT TAX exemption and has no relation to Medicaid rules. Anyone concerned with Medicaid coverage will never make anywhere near the $5,450,000 of lifetime gifts permitted before a federal gift tax is due! Thus, for all practical purposes, the $14,000 limit can be ignored for anyone worried about Medicaid.
  2. The 5-Year Lookback: When a person makes a gift of virtually any amount within the 5-year period preceding the date that person applies for Medicaid, those gifts are added together and will result in a disqualification period. The length of the disqualification (or "penalty") period depends on the total amount of the gifts made within the 5-year period and also the penalty divisor of the state where they are applying for Medicaid. A penalty devisor is the average monthly cost of long-term care in the applicant's state. For example, in a state where the penalty divisor is $5,000, if the total gifts made within the lookback period equal $50,000, then the penalty period will be 10 months.

So the bottom line is that there is NO minimum amount a parent can gift their children to avoid the 5-year lookback period. But once 5 years have passed following a particular gift, that gift will no longer count when the person who made the gift applies for Medicaid.

I hope that helps!

K. Gabriel Heiser is an attorney with over 25 years of experience in elder law and estate planning. He is the author of "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets," an annually updated practical guide for the layperson.

Medicaid Secrets

View full profile

You May Also Like

Free AgingCare Guides

Get the latest care advice and articles delivered to your inbox!

3 Comments

All of this assets info has to do with "PRIOR" to applying for Medicaid.my situation is "while already receiving benefits. " My mother has been eligible for and is receiving Medicaid benefits to live in an assisted living facility for the past 21/2 years. Recently she was sent notification of an inheritance she will be receiving in the amount of $26,000. She wants to give it to me and my brother . I am worried how this is going to effect her benefits even if she does gift it away. My question is : what do I do? And does my Mother reapply every year for these Medicaid benefits even though she has already been approved and is receiving the benefits currently? Of course we want to preserve the inheritance but I am concerned about what is legal and not legal. Please please help!!!!
My mother in law is 86 and has lived with us for many years. She has suffered from Alzhiemers and and insulin dependent diabetes for 10 years. I provide for her care at home. We are considering applying for medicaid for memory care units. I believe although we would have to work with the spend down rules she would qualify. The issue of which I have concern is that during these years we have paid these bills as a family. I am not great with finances so many bills I put on each of our accounts for automatic withdrawal For example, the dpl and vectren are on her account and often her medical supplies and groceries come from ours. I may also used her account to pay for an expense on the first and then for one of her needs or bills on our pay period. I am concerned how the past will affect this.
Attorney Gabriel Heiser, Can you help on this? In 2009 an irrevocable trust was made. But before that was set up my sister did the following : This is how it happened. My mom who is 99 years old now and in need. I took care of my mom since 2009 when she found out what happened. My sister took my mother (which I ever knew about) to an attorney before 2009 and had my mom sign papers .I did not know about all of this that was done until 2009 after all of this happened my mother told me Nancy rushed her to an attorney, and papers were ready. She told my mother it was a Medical Power of attorney they were getting. My mother believed her. This is what happened. She said my sister stood over her made her nervous and she didn't really understand the legal terms, which is understandable. Many people do not have contractual competence. She signed the paperwork she said but the lawyer did not explain it good to her and my sister did not give my mother a copy. Some time elapsed and My sister acted as my mom with the POA which turned out to be a DURABLE POA, not just a medical POA. My sister took all my mother's CD's out of the bank cashed them that had my name, my mother's name and some had my sister's name and my brother on them. Worth $170,000.00 During that time she had cashed in her life insurance and added that amount of $ to it, so my mom has no life insurance either. My mom had a stroke in 2008. I WORKED WITH HER AND TOOK HER TO WATER THERAPY, and she had Physical therapy and she was again able to walk better with a cane and was competent. I always helped her. I think my sister and brother were jealous and since they had already did paperwork with her which I did not know about or even thought about doing they got together about things which they never were close to begin with always argued and didn't want to be around each other but $$ were their goal it looks like to me and they lied about my mom , my dad and me to lawyers later on when my mom hired a lawyer to get her things back. They moved her money into an irrevocable trust along with her home and 27 acres. They made themselves beneficiaries and trustees. My mom took it to court and lost, The judges said she signed it and was competent. The lawyer died that did this POA to begin with then the Irrevocable Trust. They had talked my mom into a place around that time & told her not to talk to me or let me know where she was or not to call her grandchildren of my sons. I thought my mom was visiting my sister and going back & forth seeing my brother. She had been staying with me and it was my sisters birthday and she went to visit her so I thought she was still staying a little while longer. One day I get a call from my mom and she says come get me. I said where are you? I didn't know where that was and had to figure out how to get there in a hurry because I had a flat tire. I got it fixed ad went to find my mom over 2 hours away. I found her, she was waiting in an assisted living & I took her to a lawyer & she had the POA cancelled. But the damage had already been done. She checked her bank account & all her $$ were gone. Her home title was changed. I have taken care of her from 2009 until 2015 she fell & broke her hip and had to go into a rehab nursing home then to assisted living. A lot of $$ have been spent. I stopped working in 2009 and took care of my mom. I pay the difference in costs of the assist liv. she does not have enough to pay the bill each month. The AARP is $ 294.00 a month her RX plan is $62.00 not counting the medicines not covered fully. I pay for the Briefs, Pads, Pull ups, she knows when she has to go but the caregivers do not come on time always. It costs for my gas there every night and some days back & forth. I take her to the doctors, andbuy her clothes and personal items. She is 99. Has a calcified aortic valve, they want to do surgery a TAVAR procedure. She had a Valvuloplasty hours before her hip replacement in 2015 at her elder age and I sat there by myself scared. They did not come to see her in the hospital for the surgeries. They have not sent her a birthday, Mother's Day, Christmas, Easter, Valentine, or nothing since 2009. No help financially, if you want to call a check of $33.00 quarterly from interest. They have an attorney handling it. I can't believe this is happening. Then I was told the assets in the Irrevocable Trust will be there and would cause my mom not to get Medicaid even if it was done in 2009 and now 2018. Now I got a letter the other day and they are selling the house and want all her furniture moved out. She knows what is going on and is hurt real bad. Still hurt fro what they have done. Yes she forget s things as we all do every now and then and she is getting worse. She can not walk on her own, in wheelchair, has to be bathed, dressed, and helped to transfer to toilet and helped in that area. She can sometimes pivot on days better than other days. But these are supposed to be her golden years. Lawyers have told me you would be surprised at what families do to their loved ones. Well, This was unbelievable to me. I could have never do what they have done. I am 66 years old and helping her with my Social security check. I will not have anything or anyone to help me one day but I can't stand to see this happen to my mother. I love her. What cam I do. I wish I had her with me. I had fell while she was in the rehab and hurt my hip. I couldn't lift her as before. We had to pay $ 157.50 each day in the rehab after the 1st 20 or 21 days that Medicare pays. SHE WAS IN REHAB from April 2015 thru July 2015. $157.50 each day adds up, then after the 100th day it went up higher and you had to pay for supplies also. I have not worked taking care of my mother thru 2015. It hurts to know your family did this. I am suffering too It is like a death of the whole family it affected. Because of their greed. Now sh e has no life insurance and I am struggling so bad to help her. I do not know what to do. Lawyers cost money and can't help! I have to now find a place for her things I can not get rid of. The house was never to be sold and they are selling it. My mother worked hard. She welded WWII wings on the airplanes to help during the war. I need Life Ins for her and help to take care of her. Somebody has to be able to help me.