A common misunderstanding is that the gifting limits associated with gift and estate tax issues also apply to Medicaid eligibility. It is not uncommon to see poor do-it-yourself gifting plans created under this misconception.

The gifting limits for the federal gift tax are inconsequential for all but the ultra-rich. The federal gift tax is tied to the federal estate tax. But neither come in to play unless the total taxable estate exceeds the exemption amount, which is $12.06 million per individual in 2022.  As a result, federal tax rules rarely ever impact a long-term care gifting plan.

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Many times gifts are given without a full understanding of the Medicaid rules.  Medicaid 4 You can help you find a solution that takes these gifts into account in order to minimize your exposure to penalty periods. Before you do any major gifting, you should consult with a Medicaid planning expert from Medicaid 4 You.  To see how gifting will impact your potential Medicaid eligibility, click here.

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