It is common for those who are considering Medicaid to have questions about gifts. Under the current Michigan Medicaid law, any gifts, no matter how small, made within the last sixty months will be scrutinized. This period is known as the “five-year look-back period.” If the gift is not exempted, then there will be a penalty imposed wherein the person cannot qualify for Medicaid during the penalty period.
Charitable giving can sometimes be acceptable during the five-year look-back period. The Medicaid law says that the gift can be exempted if it can be proved that it is for “…a purpose other than to qualify for or remain eligible for Medicaid.” There is a presumption that the gift is for qualifying for Medicaid if the gift takes place during the five-year look-back.
Large one-time charitable gifts made during the five-year look-back will generally not be exempted. However, if you can show that the gift was already promised prior to the five-year period, then the gift may be exempted.
“Serial” charitable giving has a better chance of being exempted that one-time gifts. In the case of the serial charitable gifts, the person asking for Medicaid will generally make a series of gifts by paying weekly or monthly. In that event, records will be necessary to show that the gifts had been made for a long time, hopefully prior to the five-year look-back. Usually if the Medicaid applicant can establish a history of serial giving to the same church or charitable source, then the gifts will not be penalized even if they occurred during the five-year look-back.
At Heritage Elder Law we are trained in the Medicaid rules and can help advise you of your legal rights. Please call us for a free consultation.