The need for long-term care is a reality many Maryland families face, often accompanied by concerns about how to afford the staggering costs without depleting a lifetime of savings. Medicaid is a vital solution, but its eligibility rules are intricate and strictly enforced. As your trusted Elder Law Attorney in Maryland, we at JDKatz know the most critical rule to understand is the infamous five-year look-back. This provision impacts almost all families, determining if and when you can qualify for assistance. Our goal is to demystify this complex rule so you can begin the Medicaid Planning process with confidence and clarity.
What Is the Five-Year Look-Back Period?
The look-back period is a sixty-month (five-year) window preceding the date a Medicaid application is filed for long-term care. During this time, the state reviews all financial transfers, gifts, or sales of assets for less than fair market value. We examine these transfers closely to ensure they will not result in a penalty period of ineligibility.
How Does the Look-Back Create a Penalty?
If we identify a non-exempt transfer, the state calculates a penalty period based on the amount transferred divided by the average private patient cost of care in Maryland. This penalty is a period during which the applicant is ineligible for benefits, even if they are otherwise qualified. We help our clients minimize or eliminate this risk by structuring transfers correctly.
The Importance of Advanced Medicaid Planning
The key takeaway is that the more time we have to plan, the more assets we can protect. To avoid the penalty period, transfers must be made well before the five-year window closes. Waiting until a crisis hits severely limits the practical Medicaid Planning tools available to us. We encourage our clients to consult with us to proactively maximize their options.
Crisis Planning: When It’s Not Too Late
While early planning offers the most comprehensive protection, we are here to help families facing an immediate need for long-term care. Even during a crisis, specific strategies, like spousal protections, converting assets to exempt status, or implementing a Promissory Note strategy, may still be available. Our team works tenaciously to find compliant solutions that preserve as much of your wealth as possible.
Understanding the five-year look-back rule is the first critical step toward securing long-term care while protecting your family’s legacy. At JDKatz, we are dedicated to providing the sophisticated counsel you need to navigate the complexities of Medicaid Planning. Contact us today to learn how our experienced Elder Law Attorney team in Maryland can help you start planning for tomorrow.