Whats New In Elder Law/Medicaid Planning?
In February of 2006 President Bush signed into law the Deficit Reduction Act (“DRA”). The DRA drastically changed the eligibility rules for those who make transfers for Medicaid planning purposes. Particularly the “look-back” period – the period for which Medicaid can inquire into someone’s financial records, has been increased from 36 months to 60 months for transfers occurring after February 8, 2006. In addition, the DRA changed the time when the period of ineligibility caused by transfers (commonly referred to as the “penalty period”) commences. Under prior law, the “penalty period” began when a transfer of assets was made. Under the DRA, the “penalty period” does not begin until all of a person’s funds are exhausted and that person is admitted to a nursing home. This change in the rules effectively eliminated the ability to make small transfers (transfers of less than $200,000) once a person is close to the time of needing nursing home care. In light of the changes in the law insti
