Florida Medicaid Considerations You Need to Know When You Make Holiday Gifts

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As you await the holidays and you know you will be seeing friends and especially family, are you thinking about gift giving?  Do you want to give your adult children and possibly your grandchildren monetary gifts this holiday? There are pros and cons for Florida seniors in regard to financial holiday gifts. There are Florida Medicaid considerations you need to know when you make holiday gifts. For example, if you needed to apply for Medicaid in the next five years, your gifts could have significant consequences. Those significant consequences could be on both the giver and the receiver.

What could be a consequence on the giver? As the gift giver, the IRS allows a tax-free annual gift per person with an unlimited amount of donees.  But, you must be aware that this relates to tax law planning, not to Medicaid eligibility!

So, what is the opinion of Medicaid in regard to gift giving? When it comes to gifting, unlike the IRS, Medicaid has an entirely different point of view. When a person applies to Medicaid for eligibility, their assets will be reviewed and, depending on the state they live in, there is a “Look-Back” period of sixty months. It is crucial for you to read and understand this next statement.  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 the time of ineligibility is determined by the amount of the gift and the average cost of a private pay nursing home in the area.

With all that stated above, what can a Florida senior adult do? There may be some options for the person considered ineligible for Medicaid due to gift giving. The gifter could collect the gift back, or reimburse the money given, in order to “undo” the penalty. Even if possession of the money makes the gifted ineligible for Medicaid, they can spend it down by temporarily paying for long-term care or making a home modification related to their disability until they reach eligibility status. If Medicaid ineligibility will cause the person to go without medical care, food or shelter, there may also be a possibility of an undue hardship waiver.

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

However, there is positive news for a Florida senior in this situation and that is to consult with an experienced Florida elder law attorney. With the assistance of an experienced Florida elder law attorney, a potential Medicaid recipient has some options  they may consider if they receive a gift. For example, they may be able to pay off debt with a purchase of a funeral plan or a Medicaid eligible annuity. If money is received before applying for Medicaid, the money can also be spent down in a similar fashion.

We know this article raises more questions than it answers. We provide expert service to guide you through the medical, financial, and emotional stress of caring for an aging parent or spouse. Our law firm was born out of the personal journey of Attorney H. Frances Reaves as she cared for her own parents.  This experience taught her that most seniors in the United States are ignored by society, the government, business and, sadly, their children.  Most children of elderly parents don’t know how many benefits and resources are available for their parents or ailing family members. Let us help you. We encourage you to contact us and schedule a meeting.