Gifting

Don’t do it!!!!!! (unless you REALLY know what you are doing!)

The Department of Human Services penalizes gifting by dividing the amount of the gift by the average cost of nursing home care in Arkansas for that year. As of April of 2010, that amount is $4514. So, if you make a $44,000 gift, then when divided by 4514, you have a 10 month penalty. That means that you will not qualify for services for the next 10 months when the penalty begins. In the good ‘ol days, that penalty started when the gift was made. However, since February 8, 2006 Congress has made the penalty “float” for up to five years. The penalty starts when the applicant would “otherwise be qualified”, which means in the nursing home and broke and applies for Medicaid. Who pays for the nursing home for that 10 months?

 Don’t gift unless under the advice by an attorney who understands the new penalty period calculation and is willing to do the application process with you.