When people refer to a “look back” period, more than likely they are talking about the period of time that Medicaid can look back to see if someone has transferred assets for less than fair market value. This is to see if a person qualifies for Medicaid, which is a needs based program.
To qualify for Medicaid, a single person cannot have more than $1,500 in assets.
Medicaid can “look back” 5 years to see if the person has transferred assets within that time frame. If so, a period of ineligibility begins. The look back period used to be three years, but was increased to five as part of President Bush’s Deficit Reduction Act. The ineligibility period also changed under the Act. Previously, the period started when the assets were transferred. Now, the period begins when someone applies to Medicaid for long-term care benefits.
For example, if someone transferred a house worth $200,000 during the five-year look back period, and entered a nursing home, where the cost of care was about $5,500 per month, the period of ineligibility in this case would be 36 months (200,000/5,500).
A look back period can also apply to someone who is applying for SSI (Supplemental Security Income).
Not being able to pass your home to your children, or having to spend down your life savings to qualify for Medicaid can be one of people’s biggest fears. Talk to an estate planning attorney to find out the best way to plan for long term care and how best to protect your assets.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
- What Happens to an Inheritance If No One Claims It? - March 16, 2023
- How to Protect Your Blended Family Using a QTIP Trust - March 14, 2023
- Estate Planning Tips to Prevent Sibling Disputes - March 9, 2023
