Medicaid Eligibility And Family Gifts

One question our clients frequently ask us is if giving gifts to their family members can 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 donor having to file a gift tax return and count the amount toward their lifetime gifting limit (currently $11.18 million in 2018), some gifts may be treated as a transfer by Medicaid and subject the donor to a penalty, which may apply depending on the date of the gift and the date of the Medicaid application. It is important to consult with an Elder Law Attorney to understand the difference between federal tax and public benefits guidelines regarding gifts, prior to giving gifts.