Justin, My neighbor said I should just deed my house to my kids to get qualified for Medicaid if I ever need it. Is that a good idea? — Patricia
Patricia, Be careful with that advice. Medicaid has a five-year lookback period for gifts or transfers. If you give your house to your kids and then apply for Medicaid within five years, you could be penalized with a period of ineligibility. That means Medicaid won’t help pay for your care during the penalty period, and you’ll have to cover the cost yourself.
On top of that, there can be very negative tax consequence that come with the gift or transfer of your home.
There are safer ways to plan for protecting your house without risking a penalty. Depending on your situation, tools like irrevocable trusts or beneficiary deeds can protect your home while keeping you eligible for Medicaid when needed. Those options can help with eligibility at the time of application and can help guard against estate recover at the time of death, when Medicaid has a right to recover against the assets of those who were on benefits if protective measures were not taken.
Before transferring property, it’s critical to understand the consequences. We’d be happy to review your goals and design a plan that works without unintended penalties. Visit ElrodFirm.com to learn more or to request a no-charge strategy session.