President-elect Donald Trump will be inaugurated as the 45th President of the United States on January 20, 2017. On that same day the Republican controlled Senate and Republican controlled House of Representatives will begin their respective terms. It will be the first time since 2006 that the Republican Party will control both the executive and legislative branches of government.
Most Americans will pay attention to how the new President and Congress work together to nominate a Supreme Court Justice to replace the late Antonin Scalia, develop a battle plan to defeat ISIS, repeal Obama care, or reduce tax rates. It will also be prudent to monitor any changes that may be made to benefit programs like Social Security and Medicaid.
You may recall that on February 8, 2006 the Deficit Reduction Act of 2005 went into effect. This law increased the Medicaid look back period from three years to five years. What this means is that anytime an applicant applies for Medicaid, Medicaid has the legal right to examine all records to determine if any gifts were made. If so, a penalty period will be assessed for which the applicant will be found ineligible for the program.
In August 2012 Mr. Charles Boustany, a Republican Congressman from Louisiana, sponsored a piece of legislation that would have increased the look back period to 10 years. This legislation never got out of committee and even if it would have passed both Houses of Congress, President Obama would have surely vetoed it. But in light of prior history, I am fairly certain that in the near future the look back period will be extended. It could increase to seven years or even ten years. Either way now is the time to plan while the law is still five years.
It is interesting to note that between the date the Deficit Reduction Act of 2005 was actually signed, and February 8, 2006, the date the law became effective, I transferred well over $10,000,000.00 worth of assets in order to qualify my clients for Medicaid should care be needed in the future. They took advantage of the old 3 year look back period. Those that waited to plan until February 8, 2016 and after, were now governed by the 5 year look back period.
Please contact me so that we may protect your assets while the look back period is still 5 years.