Are there any Exceptions to the Medicaid Transfer Rules?

In my last post, I discussed the Medicaid rules regarding transfer of assets and the penalties associated with certain transfers. There are however, certain exceptions to the transfer rules. Transferring assets to certain recipients will not trigger a period of Medicaid ineligibiltiy. These exempt recipients include the following:

• A spouse (or a transfer to anyone else as long as it is for the spouse’s benefit)
• A blind or disabled child
• A trust for the benefit of a blind or disabled child
• A trust for the sole benefit of a disabled individual under the age of 65

In addition, special exemptions apply to the transfer of a home. The Medicaid applicant may freely transfer his or her home to the following individuals without incurring a transfer penalty:

• The applicant’s spouse
• A child who is under the age of 21 or who is blind or disabled
• Into a trust for the sole benefit of a disabled individual under the age of 65
• A sibling who has lived in the home during the year preceding the applicant entering into a nursing home and who already owns an equity interest in the home
• A “caretaker child” – must have lived in the home for 2 years prior to the applicant entering into a nursing home and who during that period provided care that allowed the applicant to avoid a nursing home stay.

Even if you transferred assets without any of the exceptions above available, a transfer can still be cured without creating a transfer penalty. The transfer penalty will be cured if the transferred asset is returned in its entirety, or it will be reduced if the transferred asset is returned partially.

If you would like to discuss Medicaid and the transfer rules in more detail, please call me today at 978.270.2189.