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Can the Medicaid Transfer Exemption to Children With Disabilities Be Used Without a Disability Determination?

** This article has been revised from its original version which was published on April 30, 2018.

Under current law, certain transfers of assets by a Medicaid applicant or recipient don’t result in any transfer penalties. An asset of any value or type can be transferred without penalty to children with disabilities regardless of age. The law allows parents of children with disabilities to transfer assets to their child who is certified blind or disabled.

The production of the child’s disability award letter to the Medicaid agency can serve as proof of disability for the transfer exemption.

While producing the child’s disability award letter may be straightforward, what happens in a case where no disability determination was ever made?

New York State Laws

According to a New York State Department of Health directive (NYS DOH GIS 08 MA/036), you may request a Medicaid disability review for the non-applying adult child. A disability review packet will be compiled and sent to the State Review Team for determination.

Although assets in any amount can be transferred to a child with a disability at any age without affecting their Medicaid eligibility, several other factors must be considered. Children with disabilities may be receiving government benefits, and it should be determined whether the transfer will affect their benefit eligibility. For example, if the child is receiving SSI benefits, a transfer could mean the loss of the child’s SSI as well as Medicaid. Whenever a transfer of assets to anyone other than a spouse is contemplated, the gift tax consequences of the transfer must be explored as well.

Look to Professionals Before Transferring Assets

Transferring assets correctly can be a complex process. Parents of children with disabilities should contact an elder law, special needs, or estate planning attorney in New York with any questions regarding asset transfers to their child and SSI or Medicaid eligibility.

Choosing and working with a law firm can be stressful. Often you don’t know what the process is, what it will cost, and whether the law firm will even be able to help you! To feel confident in your choice to work with Russo Law Group, P.C., learn more about who we are and what we do.

Our team of elder law attorneys, estate planning attorneys, and special needs (disability) attorneys have represented the elderly, adults and children with disabilities, and their families since 1985. In most professional occupations, there is no replacement for experience. At Russo Law Group, P.C., our caring and compassionate staff have been involved in literally thousands of cases. Our experience is your protection.

Please do not hesitate to contact Russo Law Group, P.C, to speak with an estate planning attorney in New York. We are happy to answer your questions during a consultation. You may also take advantage of our free seminars and webinars to learn more about how Russo Law Group, P.C., helps with all your estate planning needs.

Russo Law Group, P.C.
100 Quentin Roosevelt Blvd., Suite 102
Garden City, NY 11530
800-680-1717

This Post Has 2 Comments

  1. Hello and Happy New Year. I have a question regarding transferring assets to a disabled child for Medicaid eligibility. I am currently disabled and receiving social security disability. Does this qualify for not having the 5 year look back period for Medicaid. I do have an award letter from social security. Thank you. Anthony Delgiudice.

    1. Dear Anthony,

      Thank you for your question.

      I am happy to answer your question, wherein you wrote I am currently disabled and receiving social security disability. Does this qualify for not having the 5-year look back period for Medicaid. I do have an award letter from social security.

      The receipt of Social Security Disability (SSD) would result in meeting the criteria for the disabled child exemption. If the applicant were applying for Medicaid coverage in a nursing home, there still would be a 5 year look back period. However, if the assets were transferred to a recipient receiving SSD, within the 5-year look back, the transfer would be considered exempt and would result in no penalty to the applicant.

      Although assets in any amount can be transferred to a disabled child of any age without affecting the Medicaid eligibility of the transferor, several other factors must be considered. If you are considering this option, we recommend that you contact your estate planning attorney to discuss this matter.

      Sincerely yours,

      Kim N. Christian, Esq. | Partner

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