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ASSET TRANSFER Transferring assets may be costly if you apply for long term care and need Medicaid |
| Denver, CO. If someone suggests that you give away money or property and you are
an older adult, consider the advantages and disadvantages before saying "yes". According to the rules of the Internal Revenue Service
an individual can gift $12,000 to another individual without tax consequences. Such a gift may however, jeopardize the individual's
eligibility for Medicaid, if the gift was made in the past 60 months. Families have traditionally given money to their children and enjoyed the tax deduction through the IRS. Some people transfer the title to their home, car, stocks and other assets of value to protect them from "the government," usually meaning Medicaid. Medicaid laws have changed in recent years. Today, if an individual transfers assets, it is still legal under IRS rules, but may cause some problems if the individual is faced with entering a nursing home, assisted living, and/or need home care and needs to apply for Medicaid. Many individuals do not have the resources to finance care in the long term home for an extended period of time, since the cost today ranges from $6000 to $8000 per month. As a means of leaving an inheritance to their children, older adults many transfer assets to children without financial remuneration. In fact, if a transfer of assets for less than fair market value is made within sixty months of applying for Medicaid (since February 8, 2006), a penalty period may be imposed. At present, the penalty amount is $5546 per month in 2008. Under the rules signed on February 8, 3006, the penalty period begins on the date of the application for Medicaid.Transfers made prior to February 8, 2006 are subject to a thirty-six month look back period. The amount of the penalty begins on the date of the transfer, rather than on the date of the application for Medicaid. Therefore, the penalty for the transfer expires thirty-six months after the date of the transfer. Individuals considering a transfer of assets should seek legal counsel - or consult the Medicaid laws at prior to making a transfer; especially if they anticipate needing long term care within the next five years. A list of elder law attorneys is available. Eileen Doherty is the Executive Director of the Colorado Gerontological Society and Senior Answers and Services. She has worked in the areas of policy, clinical practice, and education in gerontology for more than 20 years. She can be reached at 303-333-3482. |
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| Senior Answers and Services and Colorado Gerontological Society are not for profit organizations dedicated to education and the dissemination of information pertinent to seniors and professionals in the field of aging. Correspondence or questions regarding the information on this site should be forwarded to: |
Eileen Doherty M.S., Executive Director |
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