There has been an important change in the law that may affect your Medicaid planning. An important part of Medicaid planning is gifting assets from the Medicaid applicant/recipient to other individuals or to a trust. However, we must always be mindful that such transfers will cause a penalty period with regard to nursing home Medicaid if they were made within the past 5 years. For decades, the Medicaid agencies have allowed the recipients of gifts to return them indirectly by paying for such things as assisted living, rent and other living expenses. However, the Appellate Division, Second Department, of the State of New York, recently decided in The Matter of Martha Weiss that in order for the Medicaid applicant/recipient to be credited with a return of the gift, the recipient of the gift had to either pay for nursing facility services on behalf of the Medicaid applicant/recipient or provide the Medicaid applicant/recipient with an equivalent amount of cash or other liquid assets. In other words, paying indirectly to providers of services for the Medicaid applicant/recipient, except in the case of nursing home care, will no longer be accepted as a return of gift.
As you can see, the court’s decision will have a big impact upon Medicaid planning for those who may need nursing home care in the future. If you would like to discuss how this court decision might affect your planning, please call my office to make an appointment.