How to Establish Transfers for Purposes Other Than to Qualify for Medicaid
For someone who needs long-term care and applies for Medicaid benefits, Florida has a five-year look-back period. The Medicaid agency will look back 60 months immediately preceding the otherwise eligible date, which is usually when the applicant is institutionalized and has submitted a Medicaid application. If the applicant made transfers for less than fair market value during the look-back period, then the assumption is that the transfers were made in order to qualify for Medicaid services by reducing resources down to the pertinent individual allowance. The applicant would then be assessed a penalty period when they would be ineligible for benefits. In Florida, that monthly penalty divisor is currently $10,809. However, the applicant can rebut this assumption by showing the assets were transferred for some other purpose than to qualify for Medicaid long-term care services. One way the applicant can try to rebut the assumption is to show they were not sick and in need of care when transfers were made, thus they were not contemplating Medicaid eligibility. Another way would be to show a habit of gifting before Medicaid was needed. In a recent case, Victoria had made various transfers to her children before she was diagnosed with Parkinson’s disease in 2016 and before needing care in 2018. After being assessed penalties for all the transfers, the first step in her case to rebut the assumption was to show that she was not ill before the 2016 diagnosis. Victoria presented medical documentation and testimonial evidence. The state tried to argue that Victoria’s dementia symptoms began in the
years before 2016. However, the court was unmoved by that argument, stating, “The fact that a future need for nursing home care may be foreseeable for a person of advanced age with chronic medical conditions is not dispositive of the question whether a transfer by such a person was made for the purpose of qualifying for such assistance.” The court next looked at each transfer to determine whether or not it was made in contemplation of Medicaid eligibility. Victoria had a long history of giving her daughter money. The court found that transfers to the daughter before the Parkinson’s diagnosis were not made in order to qualify for Medicaid benefits. This is because Victoria had a “consistent pattern of gift-giving to her daughter, were made at a time when petitioner was financially solvent, and were made before the sudden deterioration of her health.” Victoria also made a transfer of $10,000 in 2014 to one of her sons. He had borrowed money from Victoria in order to purchase a car. The court found that this transfer should not be penalized because a note was executed and it complied with Medicaid rules. “Assets conveyed through a note or a mortgage during the look-back period are considered to be transfers for full market value when the underlying loan is actuarially sound based upon the lender’s life expectancy, provides for equal payments throughout the life of the loan — with no deferrals or balloon payments — and includes a provision prohibiting cancellation upon the lender’s death.”
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