Gifting and Medicaid Planning in Michigan

It is an extremely emotional decision to place a loved one in long-term care such as a nursing home or assisted living facility. In many cases, moving a loved one into a nursing home is used as a “last resort” to provide care for a family member. Many families try to care for family members at home themselves with some people hiring part-time caregivers to extend the time their loved one can remain at home.

However, the time may come when an individual needs the around-the-clock medical and personal care that a nursing home can provide. Unfortunately, many people who need this care cannot afford to pay for the care. Medicaid steps in to help people pay for long-term care; however, Medicaid has strict rules for eligibility, including the assets a person can own and still qualify for benefits to pay for nursing home care.

The Lookback Period

As part of the asset and income test to qualify for Medicaid benefits, the agency can look at your transfers for the previous five (5) years to determine if you gave away or gifted property for less than fair market value or no value. If it finds gifts or transfers that do not fit within very specific exceptions and circumstances, your benefits can be denied or delayed.

Our Michigan Medicaid planning attorneys help you develop a plan to utilize certain exceptions to transfer or gift assets so that you can be eligible for Medicaid benefits for nursing home care.

Exceptions to the gifting and transfer restrictions for Medicaid include:

  • Equity in Your Home — Gifting a home can make you ineligible to receive benefits. However, there are some exceptions that can help you get the home out of your name so that the equity in the home is not a countable asset for Medicaid eligibility. Some examples of exceptions for gifting a home include transferring the home to your spouse, young child, disabled child, sibling, or a child caregiver. You must be careful when considering one of these transfers. We urge you to consult with our Michigan Medicaid planning attorneys to ensure you meet each and every requirement to be eligible under this exception. For example, the caregiving child exception requires that your child lives with you for the two (2) years as a caregiver before the transfer.
  • Transfers to Trusts — You may be able to transfer assets into a trust that is for the sole benefit of your child if your child is blind or disabled. The trust must be for the “sole benefit” of the child. A special needs trust for your benefit, if you are disabled or under the age of 65 years, which meets certain requirements may also qualify under this exception.
  • Transferring Other Assets — You may also be able to transfer non-home assets to your spouse, blind child, or disabled child. In some cases, you might be able to transfer these assets to another person for the sole benefit of your spouse. As with other transfers, it is best to consult with an experienced Medicaid planning lawyer before making the transfer to avoid potential problems.

Unlike transferring assets for purposes other than obtaining Medicaid benefits, transferring assets under the above circumstances will be scrutinized by Medicaid.  The agency will presume you gifted the asset for obtaining Medicaid. You have the burden of proof to show by convincing evidence that the transfer falls within the exception guidelines.

Contact Our Brighton Medicaid Planning Attorneys for More Information

The legal team of The Elder Care Firm of Christopher J. Berry, CELA want to help you develop a plan to protect your assets while providing the nursing home care your loved one needs. Acting early can increase your chance of keeping all assets and receiving the benefits you need.

Contact our office at 888-390-4360 or use our online contact form to request more information or schedule an appointment with our Michigan estate planning lawyer. We have several satellite offices for your convenience including Bloomfield Hills, Ann Arbor, Dearborn, Livonia, Novi, and Trenton.

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