Many people don’t realize that giving away money or property before applying for Medicaid can create problems. A divestment is transferring assets for less than fair market value during the five-year look-back period. This can include gifting cash, deeding farmland or a home to family, adding someone to a title, forgiving a loan, or selling property for less than it is worth.
When there is a divestment, a penalty period is imposed—a stretch of time when Medicaid will not pay for care, even though the person otherwise qualifies.
The good news is that not every transfer is penalized, and planning options still exist if divestments were made. Understanding divestment rules can prevent costly mistakes and protect what you have worked a lifetime to build. If you or a loved one needs long-term care or might in the future, schedule an appointment today to discuss planning options.
