In this Elder Law Minute, Paige Fox explains how Illinois’ five-year Medicaid look-back period affects asset transfers and long-term care planning.
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Video Transcript:
Hi. My name is Paige Fox. I’m a Senior Associate attorney here at Dent Coulson Elder Law. And I understand these topics are very complex, so I’m hoping these Elder Law Minutes can bring some insight and some more understanding to both potential clients and current clients. Thank you.
Today we are here to discuss Medicaid planning and asset preservation, particularly within a five-year lookback period. When I refer to a five-year lookback period, that is referring to the eligibility lookback period for Medicaid benefits in Illinois.
Basically, if you are looking to apply for Medicaid for long-term care in the next five years, what the state of Illinois will do is look back five years prior to the date of application, and they will look at every single transfer or a closing account, opening account—anything related to assets, usually over $1,000, sometimes less. And basically, what they will do is decide if they believe that the transfers that were made were considered exempt or if they believe that the transfer was made for the purpose of applying for Medicaid.
A few examples of nonexempt transfers that will impact eligibility within a five-year lookback period include things like the sale of a vehicle to a child for less than fair market value—or really, the sale of any asset to anyone for less than fair market value will raise a red flag to the state of Illinois. They will look at that and potentially decide that that transfer should be penalized for purposes of Medicaid within that lookback period.
It’s not uncommon—especially if people have not been planning or needing long-term care or have not even considered the need for long-term care in the last five years—for individuals to make transfers like this without even thinking whether or not it’s for the purposes of applying for Medicaid. However, in the state of Illinois, you should always assume that the state will consider that transfer a nonexempt transfer for purposes of applying for Medicaid.
So, another example would be if you have a granddaughter who just got married and you decided to write them a $2,000 check as a gift. The state of Illinois, if they see that—if it’s within the five-year lookback period—the state of Illinois will say that that transfer is not proper and will penalize you for that transfer.
So, if you are needing long-term care or potentially needing Medicaid in the next five years, and there have been transfers that you’ve made that you think are questionable, it does not mean that you automatically cannot apply for Medicaid. It just means that you need to do some serious planning ahead of time to make sure that we know exactly how many questionable transfers exist, and decide the best way we can handle that.
If you have a complicated Medicaid situation, and if you or someone you know needs long-term care and may need Medicaid in the next five years, I recommend reaching out to Dent Coulson Elder Law, who can assist with not only pinpointing where those transfers, if any, are, but also to prepare and plan for how to cover those transfers once we apply for Medicaid and to cover the cost of long-term care.
Also looking for information about Medicaid and Asset Preservation? Visit these articles:
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Dent-Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Dent-Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (618) 632-7000 (IL) or (314) 567-9292 (MO), or Contact Us and we will get in touch as soon as possible.
