Yes, we are here for you…and it's easy to meet with us! From the comfort and safety of your home you can consult with us via phone or video. To set up an appointment, call (860) 236-7673 or click here.

How transfers affect Medicaid eligibility

There are right and wrong ways to plan for Connecticut Medicaid eligibility. And transferring your assets may be an important part of planning in advance. But be sure you understand the rules. 

At a glance, here are some of the Connecticut medicaid transfer rules you should know:

1.      Transfers can result in a penalty (a period of Medicaid ineligibility) 

This means that if you transfer or gift assets out of your name during the five year Medicaid look-back period – whether it be to a family member (other than your spouse) or to a Trust – you are creating a period of ineligibility for Medicaid benefits.  

How long are you penalized?  Well, for every $13,512 that you gift or transfer out of your name, you will be ineligible for Medicaid benefits for one month.

Click here to see a video about the Medicaid penalty.

2.      There are some transfer exempt from penalties:

·         Transfers between spouses are exempt, meaning that you will not incur a penalty if you transfer assets between you and your spouse.  

·         If there is a caregiver child who has been living with and taking care of you for at least 2 years prior to your need for home care or your entry into a skilled nursing facility. (Click here to read how one of our clients did this.)

In these situations, your residence and possibly, additional assets may be able to be gifted to the caregiver child with no penalty for Medicaid eligibility.

·         If there is a child or a caregiver (such as a relative or a family friend) who has been taking care of you for at least two years prior to your need for home care or your entry into a skilled nursing facility.

This person does not need to have been living with you. Again, in these situations, you may be able to transfer assets to the caregiver with no penalty for Medicaid eligibility.

·         If your child is disabled and receiving SSDI or SSI benefits

3.    Penalty begins when “otherwise financially eligible”

It’s important to note that the transfer penalty does not begin until you are “otherwise financially eligible” for Medicaid benefits. 

This means that if you transfer $40,536 in assets to your daughter in April  and apply for Medicaid benefits the following October when you are financially eligible, the three month penalty ($40,536/$13,512= 3 month penalty) will not begin to run until the application is granted – which could take as much as 6-9 months. 

The penalty does not begin to run in April when the gift was made nor in October when the Medicaid application was filed.

4.    There is no credit for partial gift returns

So how do you undo a “penalty” if it affects your need for immediate Medicaid eligibility? 

Well, let’s go back to our previous example – you gave your daughter $40,536 which triggers a three month penalty.  If your daughter returns the entire amount to you, then the transfer is undone and there is no longer a penalty as the gift has been returned. 

But what if your daughter can’t return the entire gift?  What if she can only make a partial return of the gift? 

The State of Connecticut does not give credit for a partial return.  All of the gift must be returned to you for the transfer penalty to be voided.

5.    There is an annual gift exclusion of $15,000
(OK with IRS, but NOT when applying for Medicaid)

The annual gift exclusion amount which allows you to gift $15,000 per year per individual and avoid filing a gift tax return does create a penalty for Medicaid eligibility purposes as outlined above. 

Should you use a lawyer or one of those Medicaid application companies?

Should you transfer your house to your children? Learn more...

What is the look-back period? Click here...


Client Reviews
“I cannot find the words to thank all of you properly for your hard work and perseverance. It is a great relief to have gotten a just and proper ruling from the court. All of you have shown great professionalism and concern for the issues I brought before you.” J.G., Greensboro, GA
“All dealings have been excellent. Very professional organization. Great explanations of our options related to preparing a will. Clear, concise, great guidance and not trying to "sell us" on something we do not need. Administrative folks were super. All of our related paperwork was clearly tagged with what we needed to provide/sign/read /etc. Made things easy. Nice work.” L.G., Berlin, CT
“We loved working with your firm and really trust the advice. You have a well-deserved reputation and it was nice to check off a number of things that had been on our To-Do list. Although it's hard to make the time to take care of some of these matters, it is a great relief when you do so. I would definitely recommend your firm to anyone in need of the services that you provide.” L.M., Simsbury, CT
Everyone at the firm were consummate professionals. We felt completely comfortable with their guidance and were impressed by their compassion and commitment to us. R.H., Canton, CT
The attorney who served us was kind, thorough, and very responsive. He pointed out some issues in my mother's documents that could have been problematic down the road. After my mother passed, everything was as seamless as possible - a true gift at a time when life and death decisions were being made and emotions were overwhelming. J.B., Cromwell, CT
Great service, was on top of everything. I'm glad they were there to help us though a tough time. J.M., Farmington, CT
Members of: