Pooled charitable trusts and Medicaid issues

Medicaid as implemented through Arizona Health Care Cost Contaiment System (AHCCCS) and Arizona Long Term Care Services (ALTCS) has a manual online which discusses the types of gifts that will trigger a penalty period under both state and federal law including the Deficit Reduction Act of 2005 (DRA). The ALTCS manual also details the amount of time for a "look-back" for gifting. One should be aware that the government is almost always required however to "look-back" 60 months from the date of application for Medicaid/ALTCS eligibility. Nevertheless, the online manual is a sure starting point. To the extent that a Medicaid applicant intends to make a charitable gift brings up a point of emphasis: A Medicaid applicant must take affirmative steps to disclose this gift or any previous gifts made (even if a gift falls under a recognized exception that would not trigger a penalty) at the time of application; obtaining Medicaid eligibility through fraud or nondisclosure is punishable as a crime and is classified as a felony in Arizona. So, most gifts generally will trigger a penalty period which can be very detrimental. And, the state ALTCS agency would usually consider charitable gifts as transfers without adequate consideration however there may be a limited exception depending on when the gift was made or the underlying reason (i.e., was it made for a purpose other than to qualify for Medicaid?). But, even if a gift is considered exempt, the fact that there may be more income coming into a household could potentially disqualify a person from receiving Medicaid because Arizona has a cap on the amount of monthly income a person or couple can receive. Finally, the state will seek recovery for amounts it has paid on behalf of a customer including both benefits from a Medicare Cost Sharing program and long-term care under ALTCS. This can be done through TEFRA liens on property, filiing claims against a probate estate or potentially through a legal action. And once again, there are exceptions to recovery as well. Due to the sheer complexity of Medicaid/ALTCS and the interchange with estate planning (including the use of trusts), it is necessary to seek competent legal counsel before making any gift.