"The standard denial notice that the Division of Medical Assistance (the "DMA") gives to applicants whose countable assets exceed the eligibility limit, states that an applicant can spend excess assets on his or her needs but cannot give them away. This information is incorrect and misleading. There are several circumstances in which an applicant may be permitted to divest himself or herself of his or her assets and still qualify for Medicaid. In the worst case scenario, the Medicaid rules do not bar transfers. Instead, they impose a period of one month of ineligibility for every $5,010 given away.

The DMA regulations permit the following transfers:

• anything to one’s spouse
• anything to a disabled person under age 65 or into a trust for the sole benefit of such a person
• anything to a disabled child of the applicant, no matter the child’s age
• the applicant’s home to a child of the applicant under age 18
• the applicant’s home to a so-called "caretaker" child
• the applicant’s home to a sibling who already is a part owner and lived in the house for a year prior to the applicant’s move to a nursing home

If you or someone you know has received a denial notice with this misstatement of the law, you should be aware that the above-mentioned planning techniques are available and that you may not need to spend all of the excess assets on the applicant’s "needs". For advice on a particular situation or to discuss long-term care planning options, contact an elder law specialist."