Effective Asset Protection Strategies During The Medicaid Look-Back Period

When a Westchester County resident is seeking long-term care from Medicaid, too often they simply apply for care without planning properly, which can lead to many of their assets winding up in Medicaid’s hands instead of with their chosen beneficiaries. The far better option is to plan before the need for care arises – with the right attorney on your side, you can tailor your application appropriately. Medicaid planning is complex, but necessary.

What Is The Look-Back Period?

One of the first things to be aware of when beginning Medicaid planning is that each state has asset and income limits. If a person is seeking nursing home-level care in New York, they must have less than $30,182 in assets to their name for Medicaid to cover the costs. This may not seem like much, but the major objective of Medicaid planning is to conduct legal asset transfers to get one to the point where they can meet this limit.

That said, one cannot simply transfer their assets and income all at once until they meet the limits. The so-called “look-back period” exists so that Medicaid can verify any relevant asset transfers that occurred in a specified period (generally 60 months, or 5 years) before a person’s application for long-term care. The rationale is that if someone has sufficient assets, they should be paying for their own care rather than relying on Medicaid – but of course, this does not take into account that the average person wishes to pass things down to their beneficiaries.

Penalties & Exemptions May Apply

During the 60-month look-back period, all asset transfers will be scrutinized, and if any are found to be improper, a penalty may be assessed to the person seeking Medicaid care. What this means is that for every improper transfer of assets, there will be a period (usually measured in months) where Medicaid will not cover necessary care. This does include transactions like cash gifts – generally, if a person gives away an asset without receiving anything back, it will incur a penalty. If all assets were transferred at fair market value, no penalty will be assessed.

It is important to note that exceptions do apply, particularly to transfers between spouses – in New York, almost any transfer between spouses is exempt, regardless of the value involved. In addition, it may be possible to protect some of your assets using tools like asset protection trusts (APTs) – though be advised that APTs are generally irrevocable. A trust is irrevocable in New York unless specifically established as revocable, but APTs are designed specifically to be irrevocable in order to hold the assets in trust for a chosen beneficiary.

Contact A Putnam County Medicaid Planning Attorney

Needing long-term medical care is a specter that most people do not wish to confront until there is no choice – but it is infinitely safer and more financially stable to plan well beforehand. If you have questions about whether you qualify for Medicaid-backed long-term care, a Putnam County Medicaid planning attorney from Meyer & Spencer, PC can help to answer them. Call our office today at (845) 628-0009 to schedule a consultation.

Source:

nysenate.gov/legislation/laws/EPT/7-1.16