Normally, transfers of assets are penalized with a period of ineligibility for benefits based on the amount transferred. While the penalties vary from state to state, a $25,000 transfer is likely to cause only a few months of ineligibility, so it’s unlikely that the nursing home will seek to evict your parent. If they do, they need to find a safe place for her to move to, which could be difficult.
However, this policy often leaves nursing facilities high and dry, providing care for which they are not reimbursed by Medicaid nor paid by the family that doesn’t have the resources.
Working with the Nursing Home
We recommend consulting with a local elder law attorney to see if there is any exception that applies to benefits qualification under the circumstances so the facility is paid. For instance, one requirement for the penalty is that the purpose of the transfer was to become eligible or maintain eligibility for Medicaid. Clearly, this wasn’t the case in your situation. A local elder law attorney could advise you whether this argument might work on appeal in your state.
Learn more about Medicaid’s lookback and penalty periods.
Harry S. Margolis practices elder law, estate, and special needs planning in Boston and Wellesley, Massachusetts. He is the founder of ElderLawAnswers.com and answers consumer questions about estate planning issues here and at AskHarry.info.