” What if I give it all away?” Questions and Answers about the Medicaid Transfer Rules in Connecticut (last updated )
*CAUTION* ALL TRANSFERS MADE 5 YEARS PRIOR TO APPLICATION, WHICH ARE NOT EXEMPT , MAY RESULT IN DENIAL OF ELIGIBILITY FOR A PERIOD OF TIME IF YOU HAVE MADE ANY GIFT OR PAYMENT TO ANOTHER PERSON, DO NOT APPLY FOR MEDICAID WITHIN 5 YEARS WITHOUT LEGAL ADVICE TRANSFEREE LIABILITY IN CT: (1) recipients of gifts subject to penalty are themselves potentially liable to the State for the donor’s cost of care (2) recipients of gifts, or powers of attorney, are likely exposed to lawsuits from unpaid providers
Medicaid eligibility is a confusing and complex area of the law. If you are making a decision, or planning a course of action, because you think it will, or will not, “affect your eligibility for Medicaid” should you require long-term care, you should consult a professional from your own state, who is familiar with the local rules and agencies. This article is intended only to make you familiar with some of the basic facts about the ways in which gifts or “transfers” can affect eligibility IN CONNECTICUT. This article is included because this subject is as much misunderstood as it is widely discussed. Be aware that the law on transfers may be applied differently in different states. You should also be aware that the law in this area is changing, that what follows is only an interpretation of the rules, and that state agencies and officials may not necessarily agree with all of the statements in this article. MAJOR CHANGES HAVE MADE THE MAKING OF GIFTS MUCH MORE DANGEROUS FOR BOTH GIVER AND RECIPIENT.
If you are reading this article because you are wondering if SOMEONE ELSE, who is elderly, “should make gifts” for Medicaid, please remember that any elder law attorney worthy of the name will view the elderly person as his or her client, and not you — there is no “should” when it comes to gifts. Even if a gift won’t cause a penalty (such as to a disabled child) that does not mean that it may not still negatively impact the person making the gift. If you are elderly yourself, be sure the attorney you see makes it clear that YOU are the client, not the thoughtful relative who drove you to the appointment.
Finally, this article does not represent an endorsement of any particular course of action. As a matter of principle, I believe that the choices you make concerning your resources and your lifestyle must first take your own feelings, wishes, and comfort level into account before you can even think about whether a particular course of action will “save your family money.” As with planning for death tax savings, planning that takes into account the high cost of long-term care and the requirements of the Medicaid program should not put money saved, before your quality of life. “Giving it all away” can impact your life seriously, whether by affecting Medicaid eligibility, or by precluding the possibility of a reverse mortgage that might keep you cared for at home longer. You may wish to view my online slide-show about paying for care to consider some of the consequences of being on Medicaid. This article does not weigh the pros and cons of making gifts, but merely sets forth the Medicaid rules and regulations that will affect you if you do make gifts.