Can a person transfer their assets to a adult disabled child without a lookback period?

Yes, that's true - any policy with a cash value except for burial policy does have to be cashed in - my parents had a couple that we had to do that with. A lot of insurance through an employer or "term" policies will not have any cash or face value though, and we just had to send documentation of that before Medicaid was approved again for my dad. If you want to be a little less confused than I am, try looking at financialplan.about.com/od/insurance/a/Comparing-Life-Insurance.htm and see if you can sort out all the different types or insurance. I do know that one of my dad's policies we kept payment up on was the only "inheritance" we had after all was said and done, and it was placed in a special account that we could not combine with any other or our own funds, and was not subject to either estate recovery or taxes. My seeming expertise is really pretty limited and sometimes I am not sure how we managed to stumble through and get as much doen right as we did. My real best advice is to find a good estate planner or eldercare attorney that knows your state' s Medicaid and other rules really, really well - my parents had mistakenly gone with an outfit that profited by selling them less-than-stellar products and whose lawyer was actually out of state and could not always help much. Once we moved my Mom here, I picked a new one on the basis of his website including some good, accurate information on Medicaid. It is complicated but the oen simp[le fact is that the baby boomers are aging and overwhelming the system and Medicaid is simply not in the business of preserving homes and inheritances for anyone's chidren now. There are even states with filial responsbiitiy laws now where children can be required to pay their own funds for parent's care to some extent. I think its a bit of a minefield without getting good advice, and just getting to the good advice can be tricky too. It is not like it was when we were growing up and watched our parents deal with our grandparents, that's for sure.

Yes, that is what I meant, but in trying to get my mom on Medicaid here in Iowa, DHS wanted to count the cash value of her insurance as an asset. She decided to buy a burial contract with her life insurance, which means it is now exempt. It is a very small policy, but adding the cash value of her life insurance account to saving and checking put her over the $2,000 limit.

Since I have a large life insurance policy which will go to taking care of my son, I wanted to make sure, in case I were to need Medicaid someday, that they would not count the cash value of my account as an asset. I was floored when I found out that Medicaid wanted my mom to cash out her life insurance....I always thought life insurance was for the future!

You seem to know a lot about these things. I've seen your posts on other threads and would love any advice you have in protecting both my parents' assets and mine in the future. Thanks!

Life insurance is typically exempt from estate recovery, if that helps any. I think StevensMom proaby means she made the trust the beneficiary for her life insturance policy.

Good question....I have a son with Down Syndrome. I am single with no other children. I have set up a Special Needs trust making him the beneficiary of my life insurance. I also have a Partnership plan which allows me to pay into long term care insurance while protecting those dollars from Estate Recovery. In Iowa, Estate Recovery cannot take assets going to a person with a disability. I actually called the Estate Recovery office to make sure he was protected because a lot of financial advisors are not well versed in Medicaid law.

However, I am not transferring any assets while I am alive (I don't really have any assets other than my home and retirement accounts). Definitely get a good lawyer. You'll want to be absolutely sure your child with a disability does not have more than $2,000 in assets or he/she will lose Medicaid services.

This set off an alarm bell for me - lookback periods are now up to 10 years in some states, AND if the disabled child has assets in their name, rather than a properly done special needs trust they could lose government benefits including Medicaid. Be careful - get someone who knows their stuff about speical needs trusts and Medicaid before proceeding!