Question: I keep hearing that if I apply for Medicaid I will need five years’ worth of financial documents. Could you tell me what are the documents I should be keeping?
Answer: In New York State, you do need to provide 5 years worth of financial documentation when you apply for chronic/nursing home Medicaid. The purpose of providing this documentation is to comply with the state’s requirements regarding a look back period to determine eligibility based on current asset levels and past transfers of assets. Transfers that can trigger a penalty period for Medicaid are any that are done without compensation. There are certain persons to which you can transfer assets without triggering a penalty including, but not limited to, spouses and disabled children. Note that this look back period does not apply to community/home care Medicaid.
The documentation that you should keep on hand in preparation includes 5 full years of monthly bank statements. These statements must be provided for all accounts regardless of whether they are still open at the time of application and include all CDs, brokerage accounts, retirement accounts, checking accounts, annuities, and savings accounts. You must also provide canceled checks and/or withdrawal slips for all transactions over a certain threshold amount, which vary county to county. Other items to maintain include 5 years of tax returns, copies of documents regarding any estate of a spouse or any other person of which you were a beneficiary, closing documents for the sale of a residence, and records of insurance policies, especially those with a cash value. While, many of these items can be obtained after the fact if you do not have them on hand, it makes for less leg work at the time of application if you have been saving the documentation through the years.
Medicaid is a federal program that also has state funding but is administered by each individual county. Each county has differing rules and may require different documentation. Familiarity with each county’s ever-changing rules will ensure the smoothest possible application process.
Often more important than knowing what documents to keep on hand as you age, is to prepare your estate plan in a way that protects your assets if and when you need the assistance of the Medicaid program. The five year look back period has strict rules that must be complied with and it is the job of an elder law attorney to make certain you are dealing with your assets in a way that is consistent with these rules.