“Doesn’t the Alabama Medicaid penalty period start running as soon as you make a gift?”
“Doesn’t the Alabama Medicaid penalty period start running as soon as you make a gift?”
This is a thought that we still see in 2017.
That was true about a decade ago.
The penalty divisor now for gifts is $5,800.
It used to be that if I gave away $110,600 the very next month I would have burn up one of the months of the penalty.
By the end of second month, I’m done with the penalty.
Congress changed that about the middle of last decade to say, “No, what we’re going to do is when you qualify – we look back in time five years and if you made any gifts, then that penalty period is going to go forward.”
Sometimes there are still advisors out there telling people things that were true back in 2001 or 2004.
However, it’s not true now so be careful where you get your advice and make sure it is up to date.
So make sure you get the right advice from the right advisors
The penalty period now runs from when you are qualified for Alabama Medicaid, not from the date of the gift.
So the look back period looks back into the past 5 years and the penalty, if any, flows forward in time.
Everything is based upon the date you apply for Medicaid and are otherwise qualified.
Contact Us.
If you have any questions, feel free to get in touch with us.
We will be glad to help you figure out your best course of action.
You can reach us by phone at 1-205-879-2447.
Or, you can fill out a contact form and we will get in touch with you.
Thanks for reading, and have a great day!
PS — Gifting can still be a very effective strategy but it needs to be used carefully. Otherwise it can turn into a costly error. So make sure this becomes a useful tool, not a dangerous weapon as you plan for the future.