Planning for Transfers Post May 26, 2010

As indicated by Medicaid Communication No. 10-02 and No. 10-06 (see Post 113), the state has denied reverse half-a-loaf planning. My argument in favor of reverse half-a-loaf planning is set forth in post 113.

Suppose an individual after May 26, 2010, (Med Com 10-06) has made a transfer in contemplation of reverse half-a-loaf planning. Since transfers after May 26, 2010, Med Com 10-06 has rejected the planning.

The question then becomes what steps to take now that the gift has been made and the give-back will not work. My recommendation is that the transferee use the funds for the care of the applicant. In an ideal world, reverse half-a-loaf can be reinstated and a give-back effectuated at that time. In reality, this is unlikely. Therefore, the gifted funds should be used for the care of the applicant. If the funds are exhausted prior to the five-year look-back period, no funds will be saved, but the individual will qualify for Medicaid. If the monies (considering pension and social security), sustain the applicant for the five-year period, any monies gifted in excess of the funds used cover the look-back period are preserved.


Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© December 2010, Post 127