While every state is different, Medicaid is likely to treat an interest-only loan as a gift. If the promissory note, however, calls for uniform payments and has a payment term that is shorter than your actuarial life expectancy, then it should not be penalized. For more information about promissory notes and Medicaid, click here. That said, assuming that you can afford to make such a gift, perhaps it is unlikely that you or your spouse will need Medicaid coverage in the next five years. We recommend you consult with an elder law attorney in your state to determine the best way to plan for Medicaid. To find an attorney near you, go here: https://www.elderlawanswers.com/florida-elder-law-attorneys.