How Gifts Can Affect Medi-Cal Eligibility

We’ve all heard that it’s better to give than to receive, but if you think you might someday want to apply for Medi-Cal long-term care benefits, you need to be careful because giving away money or property can interfere with your eligibility.

Under federal Medi-Cal law, if you transfer certain assets within five years before applying for Medi-Cal, you will be ineligible for a period of time (called a transfer penalty), depending on how much money you transferred. Even small transfers can affect eligibility. While federal law allows individuals to gift up to $15,000 a year (in 2019) without having to pay a gift tax, Medi-Cal law still treats that gift as a transfer.

Any transfer that you make, however innocent, will come under scrutiny. For example, Medi-Cal does not have an exception for gifts to charities. If you give money to a charity, it could affect your Medi-Cal eligibility down the road. Similarly, gifts for holidays, weddings, birthdays, and graduations can all cause a transfer penalty. If you buy something for a friend or relative, this could also result in a transfer penalty.

Spending a lot of cash all at once or over time could prompt the state to request documentation showing how the money was spent. If you don't have documentation showing that you received fair market value in return for a transferred asset, you could be subject to a transfer penalty.

While most transfers are penalized, certain transfers are exempt from this penalty. Even after entering a nursing home, you may transfer any asset to the following individuals without having to wait out a period of Medi-Cal ineligibility:

your spouse
your child who is blind or permanently disabled
a trust for the sole benefit of anyone under age 65 who is permanently disabled
In addition, you may transfer your home to the following individuals (as well as to those listed above):

your child who is under age 21
your child who has lived in your home for at least two years prior to your moving to a nursing home and who provided you with care that allowed you to stay at home during that time
a sibling who already has an equity interest in the house and who lived there for at least a year before you moved to a nursing home
Before giving away assets or property, check with your attorney to ensure that it won't affect your Medi-Cal eligibility.

Contact us
Questions? Contact us at Elise Lampert, Attorney at Law

Elise Lampert, Attorney at Law
9595 Wilshire Blvd. | Suite 900 | Beverly Hills , CA 90212
Phone: 818-905-0601
Email:elise@elampertlaw.com
http://www.eliselampert.com

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