Medi-Cal Planning, Gifting And The Look-Back Period

Given the high cost of nursing home care in California, many families seek assistance from Medi-Cal to help pay for it. One of the most common misconceptions among families interested in qualifying for Medi-Cal assistance is that they can simply give away their assets to meet the strict eligibility requirements.

Dad at Diamond Ridge Healthcare Center (Novemb...
(Photo credit: cseeman)

While it is true that an individual can make a gift to another of up to $14,000 a year without incurring tax penalties, when it comes to making such gifts in an effort to qualify for Medi-Cal assistance, the situation is considerably more complicated. The reason for this is the five-year rule for Medi-Cal look-back.

What is Medi-Cal look-back? It is the five-year period before a person applies for Medi-Cal benefits to help pay for nursing home care. When a person makes a gift during this five-year period, the gift will in most cases disqualify him or her from receiving Medi-Cal nursing home benefits for a period of time. The greater the gift, the longer the amount of time during which benefits will likely be denied.

When you consider how expensive nursing home care is in California, the consequences of improper gifting can be financially devastating.

This is not to say that any gifts you make to children, loved ones, charity, or friends will automatically disqualify you from receiving Medi-Cal nursing home assistance. The key is to gift properly. However, the laws governing Medi-Cal eligibility and gifting are quite complicated. Given the potential for making mistakes, and the financial consequences of these mistakes, you should consult with an experienced California elder law attorney before making gifts if you hope to remain eligible for Medi-Cal assistance.

We can show you how to make gifts properly, spend-down your hard-earned assets, and maintain eligibility for valuable assistance from Medi-Cal to pay for the nursing home care you need. Contact us today at (626) 696-3145.

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