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Merlo
Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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What happens if someone gifts and then goes into a nursing

Resolved Question:

What happens if someone gifts and then goes into a nursing home I have heard that they take that money back
Thanks
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.

Hello rroo,

 

I assume that you are talking about someone who is applying for Medicaid benefits. In that case, Medicaid has a 5 year look back period when determining a person's eligibility for benefits. So any gifts that were given in the last 5 years would be counted as current assets for the purpose of determining eligibility.

 

Medicaid would not actually require that the gifted money be repaid, but the fact that the money is counted as a current asset would delay the start of Medicaid benefits until such time as the amount of the gift would have or could have been used for benefits.

 

As an example, suppose that someone is otherwise eligible for $500 per month in Medicaid benefits. If that person gave a gift of $5,000 in the last 5 years, this would delay the start of their Medicaid benefits by 10 months (the amount of the gift divided by their otherwise allowed monthly benefit.)

 

If this was helpful please press the Accept button. Positive feedback is also appreciated.

 

Thank you rroo

 

 

Customer: replied 7 years ago.
That is the info we are looking for.......so if at the time the person would be going into a nursing home had no other assests what would happen.....if medicaid doesn't pay
Expert:  Merlo replied 7 years ago.

Hello again rroo,

 

It is doubtful that the nursing home would take the person if they have no medicaid benefits and no assets of their own with which to pay the bill. They would simply not qualify for admission until such time as the amount of their gifts had been accounted for in the number of months of equivalent beneits that the gift would have covered.

 

If this was helpful please press the Accept button.

 

Thank you rroo

 

 

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