Many people believe that they can transfer their assets to their loved ones so they can qualify for Medicaid but in order to prevent that abuse, Congress authorized the states to invoke a penalty during which Medicaid will not pay for an otherwise eligible individual. This is a rule that has been put in place to help deter from this practice of transferring assets. The Deficit Reduction Act of 2005 extended the look-back period from 36-months to 60-months.
Penalties
When applying for medicaid Red Bank NJ the administering agency will review all of their financial transactions and if they are found in violation of the look-back period rules they will get a penalty (a penalty generally results from a transfer of assets for less than its fair market value). This means that you will not be able to receive any services that Medicaid would pay for during that period of time. You would be responsible for any charges and can be penalized if any assets, such as money, artwork, cars, etc were transferred, given away, sold for less than fair market value, or gifted. The reason that a person would be penalized for the above, is that the assets could have been used to cover the cost of being in a nursing home or assisted living facility. The penalty is generally calculated by accumulating all transfers for less than fair market value and diving the result by, in New Jersey, the average monthly cost of a semi-private nursing home in the State of New Jersey. Additionally, many facilities require a family member to sign as “responsible party” which could result in that person being responsible for the care of, for example, their mother during the penalty period. Finally, it is important to note that planning can still be done during the penalty period to preserve assets and accelerate eligibility for Medicaid. Its highly recommended that you use the services of a qualified and experienced medicaid planning attorney Toms River
Penalties
When applying for medicaid Red Bank NJ the administering agency will review all of their financial transactions and if they are found in violation of the look-back period rules they will get a penalty (a penalty generally results from a transfer of assets for less than its fair market value). This means that you will not be able to receive any services that Medicaid would pay for during that period of time. You would be responsible for any charges and can be penalized if any assets, such as money, artwork, cars, etc were transferred, given away, sold for less than fair market value, or gifted. The reason that a person would be penalized for the above, is that the assets could have been used to cover the cost of being in a nursing home or assisted living facility. The penalty is generally calculated by accumulating all transfers for less than fair market value and diving the result by, in New Jersey, the average monthly cost of a semi-private nursing home in the State of New Jersey. Additionally, many facilities require a family member to sign as “responsible party” which could result in that person being responsible for the care of, for example, their mother during the penalty period. Finally, it is important to note that planning can still be done during the penalty period to preserve assets and accelerate eligibility for Medicaid. Its highly recommended that you use the services of a qualified and experienced medicaid planning attorney Toms River
