They can look back how long????
MEDICAID AND & 5 YEAR LOOK BACK
Today I am going to cover, in the spark note snap shot version, what the five year look back for medicaid eligibility is as it pertains to long term care.
The 5 year look back period is a standard time period set in place by medicaid, in which they are able to look back through that 60 month time frame leading up to an individual filing an application for medicaid assistance in a long term care facility.
It is essentially a “snap-shot” on the date of application going back to the day five years prior.
SO WHAT ARE THEY LOOKING FOR?
Well, medicaid is going to inquire into any and all transfers made during that period, that were done for less than the fair market value of that asset on the date it was transferred.
This “look back” is what constantly seems to hurt families. I frequently have clients coming into my office seeking to “unload” property & assets from an individuals name prior to them entering a long term care facility. Unfortunately I have to tell them that this “look back” period is the rule put in place to prevent this unloading of assets prior to an individual applying for medicaid assistance.
If medicaid sees one of these transfers they are going to penalize the transferor (likely the applicant) for it. In doing so, medicaid is not going to seek to acquire the property or in any way take it back. However, medicaid will apply a penalty period to the applicants stay on any transfers made during that time frame for less than fair market value.
The penalty period currently sits around $5,000.00 a month. Thus, instead of taking the property, medicaid will inquire as to the fair market value at the time of the transfer and divide that difference by $5000.00.
(Ex. An applicant donates a piece of land valued at $50,000.00 2 years prior to entering a long term care facility. Upon application Medicaid will inquire into that transfer. They will then divide that $50,000.00 transfer by $5000.00, the monthly penalty rate. Upon dividing, medicaid will come out with the number 10. This number represents the amount of months the applicant will be penalized from receiving any assistance, from medicaid, to pay for their stay in the facility.)
During that penalty period, the applicant will receive ZERO assistance in paying for their stay in that facility, putting the family in a very precarious position as there would be no money left in place to pay for that applicants stay in the facility.
Once again, this is an extremely condensed version for informational purposes only. My advice? It is never to early to start planning and always seek the help of a professional who practices in this area of the law.
Estate Planning & Elder Law Attorney
Mahtook & LaFleur
“Planning Estates & Preserving Legacies”
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