Medicaid: Be Careful of Gifting to Your Family and Loved Ones

Medicaid: Be Careful of Gifting to Your Family and Loved Ones

I regularly talk to clients who are 60 years old and above about how they plan to pay for skilled nursing care if it becomes unavoidable. The major part of this conversation is an explanation of how someone who makes gifts within 5 years of needing care could be penalized before benefits are made available.

Many people are already aware of the five year look back period that the Medicaid program imposes. But, very often, clients are confused when I bring this up because they thought it was okay to gift up to a certain amount each year. They are referring to the annual gift exclusion of the Internal Revenue Code, which is $14,000 for 2015. This exclusion allows a tax-free gift of no more than $14,000 per person.

While this exclusion is helpful for tax purposes, Medicaid has a separate and much more strict set of rules. They require an applicant to report “all” gifts within five years of applying for benefits. This even include gifts under the $14,000 annual exclusion. With these rules in mind, we can make a plan to avoid complications when benefits might be needed the most.

There are detailed rules about divestment and gifting under the Medicaid program. Please consult an attorney familiar with these rules to learn more.


Cunningham Dalman, PC publishes this web site and its component parts to inform users about our firm, our attorneys and general new developments in the law. The web site and blogs are not intended as legal advice on any matter. There are many factors that may affect your situation. You should not act or refrain from acting because of information found here without first seeking appropriate legal or other professional advice from someone who is familiar with your particular circumstances.

In the operation of this web site and our blogs, we do not intend to create an attorney-client relationship with you and no such relationship shall be created by your use of this web site. Such a relationship can only be established to the extent an attorney at Cunningham Dalman, PC expressly agrees to undertake the relationship. Please do not communicate to us any information you regard as confidential unless and until we have established a formal attorney-client relationship with you. Any information you send to us before we establish an attorney client relationship may not be privileged or confidential. Information you send to us over the Internet may not be secure.

Our Practice Areas
Our Practice Areas

Recent Posts


Cunningham Dalman P.C.
PO Box 1767
321 Settlers Road
Holland, MI 49422-1767

Google Map


Scroll to Top

Tell Us How We Can Help You

Send us a quick message or call us at 616.392.1821!

Seminar Registration

Fill in the form below to reserve your spot today for each person attending. If you have any questions, please call the office at 616.392.1821.

Call Now Button