Attorney Dan Krause (Wisconsin) talks about the 5-year look-back period related to making gifts or transfers before applying for Medicaid. Many seniors need Medicaid to pay for their nursing care or assisted living. Beware that if you give away money or assets before applying for Medicaid, that can result in a penalty.
All gifts (or transfers for less than fair market value) are counted against you if they happened within 5 years before the date of your Medicaid application.
The gift or transfer will result in a penalty period which can start only after you have met the financial requirements for Medicaid (no more than $2,000 in countable assets). The penalty period means that you cannot receive Medicaid benefits during that period.
The penalty period is computed by taking the value of the gift or transfer and dividing by $9,227.81 (this is the 2021 number). The result is the number of months you will be prohibited from receiving the benefits.

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