The look back period is important when qualifying for Medicaid.

The look back period is the five year period before the date in which a person would qualify for Medicaid. Many folks think they can give away their assets in order to qualify for Medicaid to get into a Northwest Indiana nursing home, and that may be true, if you gave away your stuff years ago. When qualifying for Medicaid, FSSA will look back for a period of 60 months (hence the look back period) to see if you have made any transfer of assets.

In the Medicaid world, there are compensated and uncompensated transfers. An uncompensated transfer is a transfer of money or property for which you did not receive fair market value. For instance, if you gave your kid or grandkid your home that is an uncompensated transfer. If you gifted your loved ones $15,000 each, that is fine for estate and gift tax purposes but not for Medicaid purposes. If you made an uncompensated transfer during the “look back period”, you will be subject to a penalty period for the transfer.