Fayetteville Medicaid: Can I Give Money to My Church Without Affecting My Eligibility?

It is better to give than to receive, but if you might someday need to apply for Medicaid long-term care benefits, you need to be careful because giving away money or property may affect your eligibility.

A common question for estate planning attorneys is whether charitable donations affect Medicaid eligibility. This is an important question because the Medicaid laws impose a “look back” period of up to 5 years from the time you apply for Medicaid. This means that Medicaid will look to see if you have transferred property, by gift or otherwise, within that 5-year-period. If so, your Medicaid benefits may be delayed.

Why are gifts a problem for Medicaid eligibility?

Medicaid is what is known as a “payer of last resort.” This means all other sources of payment must be exhausted before Medicaid will pay for long-term care expenses. Unfortunately, some people anticipate that they will need long-term care in the future and, because they don’t want to give up all of their assets, give their assets away to family members in order to reduce the value of their estate. It is because of this type of behavior that the 5-year look back period was created.

Generally, any kind of gift can affect Medicaid eligibility

Any transfer that you make, no matter how innocent, will come under scrutiny by Medicaid when you apply for benefits. Medicaid does not have an exception for gifts to charities. The definition of “asset transfer” is extremely broad. It includes outright gifts and charitable donations, sales of assets for less than fair market value (which constitute a transfer of the amount by which compensation received falls short of asset value), as well as forgiveness of debt. So, if you give money to your church, it could affect your Medicaid eligibility.

Transfer of money or property are subject to review

Federal law requires each state’s Medicaid agency to investigate transfers and gifts made during the five year look-back period. In some jurisdictions, although gifts to charity may be considered disqualifying transfers, if there is a history of consistent gifts over the years, Medicaid may determine similar gifts within the 5-year period were not given with the intention to hide assets. An applicant can be required to ask the charity to return gifted assets, but this is often found to create a significant hardship for that charity, which has likely spent the funds or allocated them for some particular purpose. The gifts are reviewed on a case-by-case basis. Sometimes, if the person making the gift was not on their way to a long-term facility, the Medicaid agency may not challenge certain gifts to charity.

Fayetteville Medicaid Assistance

If Medicaid is a concern, before giving away any assets or property, check with your Fayetteville elder law attorney to be sure that your gifts won’t affect your Medicaid eligibility in Fayetteville.