Typically, Medicaid laws do not permit the transfer of assets to an individual or to a trust within the 60-month period prior to applying for Medicaid benefits if such transfer was for less than fair market value. Accordingly, a person cannot simply give away his or her assets to family members (or any other person) in order to qualify for Medicaid. Such a transfer results in a penalty for the Medicaid applicant, which is a period of ineligibility determined based upon the value of the transferred assets. The greater the value of transferred assets, the longer the penalty period.
However, an exception exists where the transferred asset is made to a disabled child of the Medicaid applicant. Specifically, Medicaid laws provide that a person may transfer assets to a child of any age who is blind or totally and permanently disabled. The exception is an unlimited one – a person may transfer all of his or her assets to a disabled child and immediately qualify for Medicaid without the imposition of a transfer penalty. The transfer of assets to a disabled child may be made directly to such child or to a trust for his or her benefit. In New Jersey, there is also the presumption that your child is disabled if he or she receives Social Security Disability benefits.
This is an important exception to Medicaid’s transfer penalty that may be utilized by many individuals with disabled children who are attempting to qualify for Medicaid benefits. If you would like to discuss Medicaid’s disabled child exception and the Medicaid application process, please schedule an appointment with one of our knowledgeable attorneys today.
