Will money moved to a CD fall under Medicaid's look-back period if it came from a joint account?

1 answer | Last updated: Sep 11, 2011

An anonymous caregiver asked...

In 1999 my husbands name was added to his mother's bank account, so it's a joint account with right of survivorship. She only gets Social Security and has Medicare. She rents a home and owns a car. She is now in a nursing facility for rehab and they feel she is not safe to return home, so we are looking at assisted living, or possibly staying at the nursing facility. We are in the process of applying for Medicaid. In 2008 with her consent we move money from her checking account into a CD in her son's name, so will it make any difference how they look at the money moved since his name is also on her account? We have given Social Service the statement where it was taken out of her account, but they say we have to show where it went. Is a debit ticket proof enough. I don't feel like they should have access to our bank account as long as we prove it was moved and how much. We had it set up in CDs that could be immediately transferred back into her account in case of an emergency. Any help you could give would be greatly appreciated.

Joseph L. Matthews

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Joseph L. Matthews is a Caring.com senior editor, an attorney, and the author of Long-Term Care: How to Plan & Pay for It...

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Joseph L. Matthews said...

When Medicaid decides whether someone is eligible for its nursing home benefits, it looks at the assets available to that person. One of its eligibility rules considers any gifts made See also:
Is there a minimum amount for assets that Medicaid 5 year look back exempts?

See all 116 questions about Medicaid Eligibility within 5 years of the Medicaid application to still "belong" to the applicant. This is to prevent people, who have too many assets to qualify for Medicaid, from simply giving assets away to their children or others and then claiming to Medicaid that they have no assets. That's why Medicaid is interested in where transferred money actually goes.

It sounds like this is the rule that Medicaid's concerned about when asking for information about where the money went that was taken out of your mother-in-law's bank account. If Medicaid determines that the money was a gift to your husband, then the money will still be considered part of your mother-in-law's assets and -- if the amount puts her over the Medicaid asset eligibility limit -- might delay her eligibility for nursing home coverage. The fact that your husband could transfer it back to her account in an emergency doesn't change things -- Medicaid's gift rule is intended to say, in effect, "Fine. This is an emergency. So, transfer it back."

The fact that your husband's name was also on the bank account might possibly change things somewhat, depending on where the money came from that went into the account. Money in a joint account can be considered as owned half-and-half by each of the named account holders. If Medicaid believes that half the money in the account truly belonged to your husband, then they might consider only half of the gift to your husband as counting against your mother-in-law's assets in deciding her eligibility.

In deciding this, Medicaid might look at where the money came from that went into the account. If all the money in the account came from your mother-in-law's personal sources -- her Social Security benefits and other money she had -- then Medicaid is not likely to consider that money as half-owned by your husband, and so would consider the money that went to the CD as having belonged entirely to your mother-in-law (and therefore is fully subject to the rule about gifts).

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