Hello, I’m Christopher Lavin, an attorney with the Lavin Law Group. We are an elder law firm here in Lebanon, Ohio. A lot of folks who are planning for Medicaid are confused. The one thing they say is, well, I’ve just got to get it out of my name because if it stays in my name, the state of Ohio or the state of Kentucky will will take it or force a suspended.
And there is some truth. That the state reviews any resource in either spouse’s name healthy, sick or not. So they will get the combined countable resources. Now the first step is you have to know what’s at risk. You don’t want to overdo it or unnecessarily plan. But yes, if we leave their assets in the name of the person who needs help or who’s applying for Medicaid, it could either disqualify them from Medicaid or it could cause ineligibility for having too many resources.
So a big part of this planning is to transfer the assets or get them out of your name. There’s a lot of ways to transfer the assets. We prefer certain trusts because they protect you more than a straightforward gift. But a transfer is still a transfer.
And a big question I’ll get from the families or the spouse or the children as if we make these transfers. Is that going to be considered fraud or are we going to get in trouble with the state? No, you have to know what you’re doing. You don’t want to give without knowledge of taxes, you don’t want to give it without knowledge for long term care. And this is where all those government numbers come into play. The five years, the penalty period, to period of restrictive coverage.
And everybody focuses on one number, the five years. The five years is not really the punishment number. It’s called the look back. And it really does nothing more than that. It simply gives Ohio the right to look back for five years and pick on us. So if you do make any transfer within the last five years, they’re not happy and they have the right to penalize us for that.
If you made the transfer ten years ago, they’re not happy, but they can’t penalize us. Now, the penalties of transfers are mathematical formulas built into the statute. It’s hard to explain on a video. We like to put them on the board and walk you through the formulas in person, but the periods of eligibility. So, yes, you can make transfers even within the five years.
You just have to know the consequence and be able to pay through that consequence. So please seek the advice of an elder law attorney, if you’re starting to make transfers for that purpose.