Rules On Gift Transfers In Colorado
What Are The Medicaid Rules On Gift Transfers In Colorado?
If you wish to apply for Medicaid, but simply own too much to qualify, you might be tempted to transfer or gift your assets to others in order to get under the Medicaid income limits. However, there are penalties for anyone who transfers certain assets within five years of applying for Medicaid.
At The Hughes Law Firm, P.C., in Denver, we help elders create plans that allow them afford nursing home care with the assistance of Medicaid benefits. Our experienced lawyer also provide skilled assistance with many other issues of elder law, estate planning and probate.
The Five-Year “Look Back” Rule
If you do choose to transfer assets and money during within five years of applying for Medicaid — the “look back” period —, the government may determine that you are ineligible for Medicaid for a time. The specific length of time is known the transfer penalty period.
While calculating this transfer penalty period can be quite complex, it essentially boils down to this: You must divide your total transfer amount by the average monthly cost of nursing home care in your state, which was $7,854 in 2017 for Colorado.
For example, if you live in Colorado and you transferred $100,000 to a child during the five-year look back period, your transfer penalty period would be 12 months and 22 days ($100,000/$7,854, rounded up to the next whole day). This means you would not be eligible for Medicaid benefits for more than 12 months after you move into the nursing home. This is difficult to pay if the $100,000 you gave away was your total savings.
Can I Make Any Gifts Or Transfers?
While many gifts or asset transfers will trigger a transfer penalty period if done within five years of your Medicaid application, there are specific types of transfers that are exempt from this rule. These exemptions include, but not limited to:
- Transfers between spouses
- Transfers of assets to a child who is blind or permanently disabled
- Transfers of assets to a trust for the sole benefit of someone under age 65 who is permanently disabled
- Transfers to purchase Medicaid-exempt, immediate annuities, but only if certain criteria are met
- The transfer of your home to a child who is under 21, blind or disabled
- Transferring your home to a child who has lived in the same home for at least two years before you entered into a nursing home and who provided you with care that made it possible for you to stay in the home during that time
- The transfer of your home to a sibling who has resided in the same home for at least one year before you entered the nursing home and who has an equity interest in the home
Helping You Navigate Gift Transfer Laws And Avoid Costly Mistakes
Since the information above is simply a basic outline of how Medicaid’s transfer laws apply in Colorado, it is always best to contact the attorneys at The Hughes Law Firm for more detail. In fact, while Medicaid planning is now more difficult, it is not impossible, especially when you have one of our knowledgeable lawyers by your side. Let us help you understand and navigate through Colorado’s gift transfer laws and rules.
Contact The Hughes Law Firm today, and let us help you create an effective strategy to obtain the care you need while still preserving a portion of your assets for your family.
Contact Us Today For A Free 20-Minute Consultation
We understand that every situation is different. This is why we will carefully analyze and evaluate the Medicaid regulations that may be applicable to your case in order to determine which particular gifting strategy will work for you.
We offer free 20-minute phone consults, so contact us today, and see how we can help. You can reach us online or call us at (303) 758-0680. We have offices in Denver, Fort Collins and elsewhere in Colorado, so you are never far from an experienced attorney.
- Elder Law
- Guide To Medicaid
- Income Rules On Medicaid In Colorado
- Is Medicaid Planning Legal And Ethical?
- Life Care Planning
- Protecting Assets From Nursing Homes
- Medicaid FAQs
- Medicaid Planning With Annuities In Colorado
- Spousal Impoverishment Protections In Colorado
- Elder Law, Medicaid & Veterans’ Benefits