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Are There Elder Law Risks When Making End of the Year Financial Gifts?


Do you love the holidays and getting together with family and deciding what gifts to get all your family for holiday presents? Are you considering giving gifts of money to your children and grandchildren this holiday season? Are there elder law risks when making end of the year financial gifts? Yes, as a Florida senior you should know that monetary gifts can impact Medicaid eligibility. In fact, if you needed to apply for Medicaid in the next five years, your gifts could have significant consequences. Be aware that the impact could be on both the giver and receiver.

We would first like to address the gift giver first. You need to keep in mind that the IRS allows a tax-free annual gift per person with an unlimited amount of donees. Be aware, though, that this relates to tax law planning, not Medicaid eligibility.

For gifting, Medicaid takes a different stance. To determine Medicaid eligibility a person’s assets are reviewed with a “Look-Back” period of sixty months, depending upon the state. If it is found that the Medicaid applicant gifted money, or made an uncompensated transfer, in order to be eligible for Medicaid, the penalty can be Medicaid ineligibility. The length of time of ineligibility is determined by the amount of the gift and the average cost of a private pay nursing home in the area.

However, there may be some considerations for the person deemed ineligible for Medicaid due to gift giving. The gifter could collect the gift back, or reimbursement, in order to “undo” the penalty. Even if possession of the money makes the gifter ineligible for Medicaid, he or she can spend it down by temporarily paying for long-term care or making a home modification related to his or her disability until he or she reaches eligibility status. In addition, there may also be a possibility of an undue hardship waiver if Medicaid ineligibility will cause the person to go without medical care, food or shelter.

In addition, there may be important impacts on the gift receiver. All states have an asset limit to be Medicaid eligible and it is not very high. Even a small gift can push a potential Medicaid recipient over the eligibility limit.

Fortunately, with the assistance of an experienced Florida elder law attorney, a potential Medicaid recipient has some options if he or she receives a gift. For example, he or she may be able to pay off debt, purchase a funeral planning or a Medicaid eligible annuity. If money is received before applying for Medicaid, the money can also be spent down in a similar fashion.

Contact our office to discuss your options if you will be giving or receiving money or other assets this holiday season and anticipate this may impact your Medicaid eligibility. When your family or financial health is on the line, trust attorney Paul Riffel to help you protect your interests and achieve your goals. Attorney Paul Riffel has been practicing law in Florida for over 39 years, focusing in the areas of Tampa estate planning and family law. We encourage you to contact us and schedule a meeting with us.

Tampa Estate Planning Attorney

Paul Riffel Law is located in Tampa FL and serves clients in and around Brandon, Tampa, Valrico, Odessa, Thonotosassa, Gibsonton, Sydney, Dover, Land O Lakes, Oldsmar, Apollo Beach, Lithia, Safety Harbor, Trilby, Plant City, Durant, Holiday, Hillsborough County and Pasco County.

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