In New York, there are no penalties for gifting assets if you need to qualify for Community Medicaid, also known as Home Care. However, in determining Medicaid eligibility for Institutional Care (aka Nursing Home care), there are strict rules in place for transferring assets.
Institutional Medicaid applicants are subject to a 5 year look-back period on assets that are given away. Medicaid will then examine each asset given away, assign a value to it, and assess a penalty period during which the applicant will have to privately pay for Medicaid.
The penalty period is calculated by dividing the amount transferred by what Medicaid assesses the average private pay cost of a nursing home in your County. The penalty period does not start to run until the applicant is receiving institutional care (i.e., residing in a nursing home) AND has applied for Medicaid and would otherwise be eligible to receive Medicaid but for the transfers.
As stated above, the 5 year look-back period does not apply to Community Care. Also, certain gifts are not subject to penalty. Examples of gifts that are not subject to a transfer penalty are those made to a spouse or directly to a disabled child or to a trust for the sole benefit of a disabled child. There are other exemptions to penalties as well.
If you have a question on how to gift assets and qualify for Medicaid Institutional Care, contact attorney Moira Laidlaw at (914) 767-0646 or email Moira at email@example.com.