Q: I have read that a Medicaid applicant won’t be penalized for making transfers to a disabled child during the look-back period, but I would like to know if there is an age limit for the child. My mother has Alzheimer’s disease, and I am her agent under a power of attorney. I am considered permanently disabled by Social Security and collect Social Security disability benefits. Can my mother transfer assets to me without being penalized by Medicaid? I have been taking care of all her affairs for the past six years, and she agreed (in writing) to pay me $300 a month for these services but I have never cashed the checks. If I can’t transfer the money because of my disability, can I do it because of the agreement? I am now in need of this money because of my own medical bills.
A: Yes, there is an exception to the usual Medicaid transfer restrictions for gifts to disabled children of the Medicaid applicant. Your mother can freely transfer assets to you at any age. The fact that you are receiving Social Security Disability Income (SSDI) or Supplemental Security Income (SSI) is sufficient proof of your disability. Fortunately, this means that we don’t have to get to your second question about whether your mother now could make good on your prior compensation agreement. Because you didn’t cash the checks your mother gave you, that might be treated as a gift from you to your mother –- in other words by giving you the checks, she already fulfilled her obligation under the agreement. In short, that would be a gray area that could depend on the mood of the person evaluating your mother’s application for benefits.
Contact Vasiliadis Pappas Associates to learn more about this and other measures to protect assets.