We transferred my elderly mother's house into an irrevocable trust 10 years ago. She lives at home with my sister, and now needs 24/7 care. In November 2011, we transferred her other assets into the trust to qualify her for Community Medicaid, which provides a home health aide during the day, so my sister can go to work. If my mother needs to enter a nursing home, I know Medicaid has a five-year look-back period for assets transferred to the irrevocable trust. Does the value of assets Medicaid will consider diminish over that five-year period? In other words, after one year, would Medicaid only be entitled to 80 percent of these assets?
That's the way Medicaid rules used to work; but the law has changed. There's no pro rata schedule anymore.
The five-year look-back begins when your mother goes into a nursing home and applies for Medicaid, says Bernard A. Krooks, a New York City elder law attorney. If she applies in May 2014, for example, Medicaid looks at the full value of assets transferred since May 2009.
For readers who aren't aware, transferring your assets to others, or to an irrevocable trust, temporarily disqualifies you for Medicaid nursing home benefits, although not for at-home care. To determine how long your eligibility will be delayed, Medicaid divides the value of the transferred assets by the average monthly cost of nursing home care in your geographic region.
On Long Island, the average monthly cost is now about $12,000, says Krooks. This means if your mother transferred $120,000 to the irrevocable trust within five years of applying for Medicaid, her eligibility for coverage will be delayed for 10 months.
The bottom line Gifts that you made within five years of applying for nursing home benefits delay your Medicaid eligibility.
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