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Do I have to spend all my assets to qualify for Medicaid? Can’t I just give them to my kids? - Portland, Oregon.

July 14, 2010

So, let’s say this hypothetical couple with $100,000 can see down the road that the need for long term care is coming. Maybe one of them has Parkinson’s disease or Alzheimer’s. If they give away $50,000 to their kids, how does Medicaid look at that?

Again, timing is important. If you are talking about wanting to apply for Medicaid soon, giving away your money is not a good idea. You shouldn’t do this unless you are sure that you won’t need to apply for Medicaid for at least five years.

What if  the situation is “My husband is in the nursing home now and starting next week I am going to be on the hook for $6,500 a month. What do I do?”

In that type of a case, we establish the continuous period of care and we establish what your assets are. That tells us what you have to spend in order to qualify for Medicaid. Let’s say you have a house and a car and some other valuables. The house and car are not counted; they are considered “exempt.” The remaining assets could be any combination of things: his IRA, your IRA, a checking account, a little pot of gold in the basement, cash, some stock, an annuity, the cash value of a life insurance policy, a second car, etc.. That all gets added together. If it’s $100,00, your husband can’t get Medicaid until that $100,000 is reduced to $50,000. And there are no rules that say how you spend the money—except that you cannot give it away.

If you do give it away, you’re going to create an ineligibility period for Medicaid.

There are two exceptions:

•    If you have a disabled child, you are allowed to make gifts to the disabled child—any amount, any asset. 

•    If you have a son or daughter who lives in your home with you and provides care that keeps you out of a nursing home for at least two years, you are allowed to give your house—and only the house—to that care-providing son or daughter. Not grandson, not granddaughter, not uncle, not cousin, not next-door neighbor—son or daughter only.

Paying for a family member's care is often a very expensive and long term commitment. An attorney can help you explore your options - Contact the Elder Law attorneys at the Law Offices of Nay & Friedenberg in Portland, Oregon at (503) 245-0894 to set an appointment.