Can you explain on how you can make exempt gifts to relatives for Medicaid purposes?

Q: How can my friend gift away money to his nieces and nephews and avoid a penalty from Medicaid? (Pittsburgh, PA)

A: No one can answer this question without knowing all the facts surrounding the potential applicant including but not limited to age health, assets and how they are titled, health insurance resources, etc. You need to consult with an attorney versed in Medicaid regulations. I think you may be confusing “unlimited gifts” with the Federal Gift tax exemption, which has nothing to do with Medicaid. The basic idea is that all transfers for less than fair market consideration (deal and gifts to relatives) within the five-year period prior to a Medicaid application for benefits, and render the applicant ineligible for Medicaid benefits to the extent of the value of assets transferred. An attorney experienced with regulations of Pennsylvania’s Department of Human Service’s administration of the Federal Medicaid program, can guide you and advise if any and what exemptions may be available to your applicant.

If you feel like this issue relates to you, or a problem that you are experiencing, please contact me so that we can discuss your situation.