Giving assets will not automatically qualify you for Medicaid.

The Medicaid program is very complex and irrational. A gift to your child will subject you to a Medicaid transfer penalty for nursing home care coverage if made within five years of the Medicaid application (unless the gift meets one of the exceptions to the penalty rule).

So, you may be wondering – what is the penalty? The penalty is simple – Medicaid will not pay the nursing home for a period of months depending upon the amount of the gift. By the way, joint bank accounts with your children are treated as owned by the Medicaid applicant. So, even if you added your child’s name to the account ten years ago, the account is still yours. Also, Medicaid may do a tape match to track down assets owned by you based on your social security number.

In New York, you may not be aware that there is no transfer penalty for Medicaid home care. Yes, no penalty unless you apply for Medicaid nursing home care within the five years of the gift. Where will the money come from to pay the nursing home?

Another important question to be asked is the following: When does the Medicaid transfer penalty period start? Since 2006, the Medicaid transfer penalty period does not start to run unless you are in a nursing home, apply for Medicaid and qualify for Medicaid but for the transfer penalty.

You may be getting the picture here. This is complicated! How do I find out

about the exceptions and can I protect my assets by planning in advance or even in crisis? There are Medicaid strategies that will allow you to protect some or all of your assets depending upon your particular situation.