Long Term Care and Medicaid
Portia B. Scott, J.D., L.L.M. • April 1, 2021

Look Backs and Bright Lines - What you need to know.

You may already know that when applying for Long Term Care through Florida’s Medicaid Program, there is a “look back” period of 60 months, That is, Medicaid may temporarily disallow benefits otherwise payable for Long Term Care (such as for skilled nursing facilities) if there were disqualifying transfers of assets in the 5 years immediately preceding the claim. Certain transfers are allowed, which is part and parcel of some Medicaid Plans, but out-right gifts are usually disqualifying events. 

 

Until recently, there was no comparable look back period for Veterans’ benefits such as War time Pension, with or without Homebound enhancement or Aid and Attendance enhancement.

 

That changed October 18, 2018. The VA now has a look back period and it seems the VA is going to keep it. The VA benefits, when received, remain “needs based,” payable monthly and are tax-free. However, the VA will consider all transfers made during the 36 months immediately before the application is submitted.

 

Also, there is a “bright line” asset limit. Until November, 30, 2021 that asset cap is $130,773.00 and it will be subject to COLAs which are tied to Social Security COLAs. Those assets do not include homestead, furnishings or a car but do include the applicant’s annual income. This bright line replaces the old case-by-case analysis where the VA would be asked to determine if it seemed “fair” for the applicant to receive a pension, though the general rule of thumb was an asset cap of around $50,000.00 to $75,000.00.

 

Only if the applicant has assets above the $130,773.00 figure (including those gifted or transferred at less than full market value during the 36 month look back period) is there a possible disqualification period. 

 

If the applicant, for example, had $100,000.00 in assets in January and gave $14,000.00 to each of his 5 children in February and submitted his application in March, he would not have a disqualification period for his pension. (The $100,000.00 total assets less the 5 gifts of $14,000 results in a balance of $30,000,00 remaining assets. However, since he was not above the asset cap to begin with, there is no Disqualification.)

 
By contrast, if another applicant had $200,000.00 in assets and gave comparable gifts, she would be looking at a disqualifying period during which she would not receive a pension. The amount of time she would be disqualified is, currently, the amount over $130,773.00 she gave away divided by the maximum pension awardable at the time of the application. So, $200,000.00 - $130,773.00 = $69,227.00 this is the maximum amount she will be determined to have disqualifyingly transferred. That $69,227.00 is divided by the maximum pension which results in the disqualifying period. That disqualifying period will begin on the first day of month immediately after the month in which the transfers were made.

 

There are, of course, tools which can be used to allow an applicant to qualify, including regaining possession of the disqualifying transfers and then making the transfers in a manner which is not disqualifying.

 

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By Portia B. Scott, J.D., L.L.M. June 4, 2025
I have, from time to time, an opportunity to review family law agreements when dealing with a probate estate proceeding or a Trust administration. These family law agreements can take the form of a Divorce Decree, Final Judgment of Dissolution of Marriage, a Post-Nuptial Agreement, an Ante-Nuptial agreement (often called a "Pre-Nup"), mediation agreements and temporary orders which might include temporary alimony payments plus of course, the common charging liens filed by attorneys involved. I also get to review Qualified Domestic Relations Orders ("QDRO's") from time to time. Many of these documents are drafted without the help of an attorney. Sometimes, they will have been drafted by a paralegal or another lay-person, sometimes by the parties themselves. When I make inquiry of the parties about the documents, I often find the people who drafted them believe that, if there were a Judge involved in the underlying matter, the Judge would "fix" the document if it were wrong. So, if a Pre-Nup calls for extra alimony in the case of one party's infidelity, and, if that is not something the law books would allow, they believe that the Judge would tell them so and strike it from the agreement. Similarly, if someone's settlement agreement provides for one party to pay the other alimony even in the event of the remarriage of the party receiving alimony, the paying spouse believes that the Judge will tell them that Florida law does not require such payments to continue. The judge might similarly strike a provision for "permanent alimony" if the legislature had prohibited judges from ordering permanent alimony. Even if a QDRO was ordered to divide up one party's 401(k), some people believe the Judge will create the QDRO. None of this is true. If you come before the Court with an agreement, you can actually change the law as it applies to your own case. So, if permanent alimony has been ended by the legislature, but you agree to it in your settlement agreement, the Judge is not going to advise you that you are going against what authority the Court would have if you had not settled and had gone to trial. The Judge may ask you if you really agree to these terms and, if so, enter the Order requiring more than the Judge could ever have ordered at a contested trial. The best you can hope for from a Judge is when the judge sees the document - if the Judge reads it- is for the Judge to tell you to consult an attorney. If a Judge ever does tell you something like, "you really should talk to an attorney," this is a big red flag and you should take the Judge's advice. The Judge cannot, may not give you any advice other than to recommend you speak with an attorney. The long and short of it is there are reasons why it can often end up being less expensive to consult an attorney than to do some work for yourself.
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