Federal legislation passed in 2006 has turned many former procrastinators into pre-planners. The Deficit Reduction Act, signed into law by President Bush in February 2006, extends Medicaid’s "look-back" period from three years to five. "Look-back" is the term for the period of time during which financial transactions of a Medicaid applicant/recipient are subject to review in determining whether or not that person is eligible for Medicaid (called MaineCare in Maine).

Larry Raymond has been with the Lewiston Law firm of Isaacson & Raymond for over 50 years. He isn’t surprised by the increased interest in planning for the future, "I’ll have three or four clients a week call or stop by inquiring about what steps they should take."

Under the current law, when an elder applies for MaineCare, any gift the elder gave to a child within the 60 preceding months will make it more difficult for the elder to qualify for MaineCare. According to Raymond, the word has gone out and many people are asking the poignant questions earlier, "Last minute planning is now more difficult than it used to be. Fortunately most people are aware of the changes and are taking appropriate steps."

The state will not let you just give away your property or your money to qualify for Medicaid. Gifts or transfers for less than fair market value that are made during the "look back" period may cause a delay in their eligibility. For gifts made before February 8, 2006, the ineligibility period begins when the gift was made. For gifts made on or after February 8, 2006, the ineligibility period begins when the applicant enters a nursing home and is otherwise eligible for MaineCare except for having made the gift.

Separate from the MaineCare eligibility issue, one of the most common questions that Raymond hears has to do with homes or land, "People always want to know if they should put their home in their kids’ names. By asking the client to consider five situations, Raymond says they are able to come to the conclusion on their own. "Do you want your child to own your home if: (1) they get divorced or (2) go into bankruptcy or (3) get sued or (4) pass away before you or (5) have a bad habit you don’t know about (an example could be gambling)?"

Raymond says it is important to remember that the Federal Estate Tax threshold currently stands at $2 million dollars and increases to $3.5 million dollars in 2009. In Maine that threshold is currently $1 million dollars.

Raymond says, "It may be a bit of a cliché, but it is never too early to start planning."
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