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My aunt and uncle are residents of PA. They
were told that they cant give monetary gifts
over 500 per month because if my uncles
health declines any further then their daughter
as the receiver could be sued for the money
back up to five years. Is this true?
Asked on December 25, 2018 under Estate Planning, Florida
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 3 years ago | Contributor
If someone goes into a nursing home or gets other care paid for by Medicaid, then the state agency paying can look to recover any amounts that person transferred to others, including family, which were not transfers made for "fair market value" (i.e. when you buy something from someone for what that item or services are actually worth). They can recover transfers made up to 5 years prior to Medicaid starting to pay. This is done to prevent people from "hiding" their assets with family or friends or giving gifts to family and friends while then forcing the taxpayers to pay for their medical care.
Generally, gifts of up to $500/month are allowed, but over that amount, the state can look to recover--i.e. sue, if necessary--the money gifted within 5 years of Medicaid starting to pay.
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