Gifts to Family Members Can Affect Medicaid Eligibility

One question we are often asked by clients is if giving financial gifts to their family members will affect them adversely if they need to apply for Medicaid to cover the cost of nursing home care. Our response is that while current federal law permits gifts up to $15,000 annually, per individual, without the recipient having to pay a gift tax, such gifts may be treated as a transfer by Medicaid, and a penalty may apply depending on the time of the gift and the Medicaid application. It is important to consult with an Elder Law Attorney to understand the difference between between federal tax and Medicaid guidelines regarding gifts prior to giving them.