Florida Medicaid Web Site: Transfer Rules
 
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Asset Transfer Rules

As stated elsewhere, the applicant may have only $2,000 and the exempt assets to be eligible for Medicaid. Since the well spouse may keep $109,560 plus the exempt property, if the couple is over this amount, they may consider transferring some of these assets. Transfer of assets refers to a situation in which the applicant or the well spouse transfer assets to someone other than the spouse without receiving a fair consideration for the transfer. The most common example is a gift. When the applicant or the well spouse transfer assets, the applicant will be ineligible for Medicaid for a period of time. 

The actual number of months that the applicant will be ineligible for Medicaid is calculated by taking the value of the asset transferred and dividing it by the average monthly cost for nursing home care, as determined by DCAF. As of January 1, 2001, the average cost of nursing home care in the state of Florida is determined to be $3,300 per month. Therefore, if the applicant or the well spouse transfers assets worth $50,000, that amount is divided by $5,000/month, and results in a 10-month period of ineligibility. If the applicant or well spouse transfers $132,000 in assets, again this amount is divided by $5,000, resulting in a 26-month period of ineligibility.

The Look-Back Period

The "look-back" period is the maximum amount of time DCAF is allowed to look-back at transfers of assets. Currently it is 60 months. Therefore, in the above example, if the individual transferring the $132,000, does not apply for Medicaid until after 60 months from the date of the transfer, then there will be no additional time of disqualification.  If however, the applicant were to apply any time during the 60 month disqualification period, then the DCAF case worker will take the value of the transfer, i.e., $132,000, and divide it by $5,000 and that will result in a 26 month period of ineligibility from the date of the transfer. In that situation, the look-back period is still 60 months, but the disqualification period will continue until the time limit is exhausted, because the applicant applied before the 60 month time had run. This is a very serious trap for the unwary.

The look-back period for living trusts has been extended to 60 months. Therefore, it is imperative, if the situation involves a living trust, that it be scrutinized very closely. 

Despite the strictness of the transfer rules, many techniques can be utilized that are legitimate and proper transfers and can reduce the size of a Medicaid Estate and to protect the family inheritance. Some of these strategies involve establishing certain trusts, legitimate gifting programs and specially designed annuities from Senior Management Group.

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Senior Management Group, LLC, copyright 2005.  All rights reserved.

Disclaimer: The information provided on FloridaMedicaid.com is not intended to be legal advice, but merely conveys general information related to legal issues commonly encountered. Your access to and use of this website is subject to additional Terms and Conditions. 2005 Senior Management Group, LLC. All rights reserved. Senior Management Group, LLC does not offer legal referrals (as defined in State Bar of Florida Pertaining to Lawyer Referral Services).