Retirement & Financial Planning Report

Some readers had questions about an item in last week’s issue addressing Medicaid’s “spend down” rule. Here’s some more information:

To qualify for Medicaid you must meet certain tests (mainly, you must have few assets) at the time you apply. Part of the application is a form that you must fill out, listing your assets. On this form, you have to list all asset transfers made within the previous 36 months (60 months for transfers to trusts.) Medicaid treats different transfers differently: Someone who has transferred $50,000 will be treated differently from someone who has transferred $5,000. In essence, the more you have transferred, the longer you must wait before applying to Medicaid. If you apply too soon (before the waiting period ends), your application will be denied. (Under penalty of law, you have to declare how much you transferred and when.)


The person transferring the money (or other property) has to wait a “penalty” period that depends on the value of that gift (to a loved one, for example). The period equates to the estimated amount of time that gift would have paid for a nursing home. For example, if the person gave away $30,000 and the daily cost of a nursing facility locally was $200, the person would have to wait for 150 days to apply for Medicaid to comply with the law.

Need more info? Call your tax adviser, or contact the National Association of Elder Law Attorneys at 1-520-881-4005.