Will Medi-Cal Let Me Make Gifts To My Wife Without Penalty?
YES! For qualification for Medi-Cal, there is presently a 30 month look back period for making gifts. But this look back period does not apply between spouses. We have discussed in previous blogs how to properly transfer the home between spouses in order to avoid a state lien after the Medi-Cal recipient passes away. There is no penalty period for this transfer.
The ill spouse and the well spouse can both have any amounts of qualified funds, like IRAs, when qualifying for Medi-Cal. These are called “exempt assets.” The ill spouse can then have no more than $2,000 in regular or “non exempt” assets. The well spouse can have up to $119,220 in regular assets. So for qualification for Medi-Cal, the ill spouse will generally transfer her regular assets to the well spouse, so that the ill spouse has no more than $2,000 in regular assets.
If the well spouse then has more than $119,220 in regular assets, he can gift a portion of that amount to other individuals, to get him down to $119,220, but penalty periods can apply. Medi-Cal will ask if any assets have been gifted within 30 months prior to qualification for Medi-Cal from either spouse to other individuals. The gifts from the ill spouse to the well spouse do not create penalties. But any gifts to other individuals, like family members, can create penalty periods for qualification for Medi-Cal.
To figure out the penalty period, divide the amount of the gift by $7,628. The answer will give you the number of months of ineligibility for Medi-Cal. So, if $35,000 is gifted from mother to son within the last 30 months, that amount is divided by $7,628. The solution is 4.58 (rounded down to 4) months of ineligibility. So if the gift was made in October 2014, the Medi-Cal applicant would not be eligible for Medi-Cal until February 2015. Your elder law attorney can help you lower the months of ineligibility caused by gifting, through long term care planning. Do not attempt any transfers without the advice of your elder law attorney.
Your elder law attorney will help you to increase the quality of your life, and not just figure out who-gets-what after you pass away. For additional information, you can contact your elder law attorney Michael J. Young. This information is not to be taken as legal advice, and you are advised to see your elder law attorney. At the law offices of Michael J. Young, 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA http://www.WalnutCreekElderLaw.com, 925-256-0298,email@example.com, we practice elder law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with Sustainable Estate Planning TM, long term care planning, asset protection plans, special needs trusts, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order to help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension Benefit.