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Stumbling Blocksfor the Unwary

Overcoming Hurdles and Avoiding
Future Problems

The Five-Year Lookback

When an individual applies for Medicaid to pay for the cost of their care, they are subject to the Medicaid Five-Year Lookback. Most people do not fully understand this lookback rule. It is really an audit period. Anything you give to another person for less than its fair market value (gift) causes a period of ineligibility for Medicaid. The gifts made over the previous five years are added together and the period of ineligibility begins as soon as the applicant is out of money. Some nursing homes will look to the children to pay during this period. It is a real cause for concern. Nevertheless, there are ways to resolve this and oftentimes the gifts can be addressed without penalty or problem, if managed properly. Zacharia Brown's years of experience are invaluable in this area. We've helped hundreds of families convert the gifting issue into a non-issue.

Estate Recovery

Pennsylvania’s Estate Recovery program provides that when a person who is on Medicaid passes away, his or her Estate must pay back the Commonwealth of Pennsylvania up to the amount that was paid by Medicaid. Currently in Pennsylvania, this amount can only be recovered from the assets that pass through an individual’s Will. Estate Recovery is a very serious issue and you must always be vigilant in addressing it. However, there are simple, common sense approaches to avoiding the pitfalls of Estate Recovery.


When an individual no longer has the mental capacity to make decisions on their own behalf, and they do not have a power of attorney, a guardian needs to be appointed to make decisions on their behalf. A guardianship proceeding is started by filing a petition in the Orphans’ Court in the county that the incapacitated person lives and a hearing is held to establish the following:

  • The individual lacks the mental capacity to receive and evaluate information and to make informed decisions
  • Other alternatives to guardianship have been pursued but have failed
  • A guardian who is able to support the needs of the individual
  • Another individual is willing to act as guardian

The process can be time consuming and expensive, especially when compared to the alternative of having a valid power of attorney. In certain circumstances, however, a guardianship is the most appropriate course of action, or unfortunately unavoidable, to preserve the safety and well-being of the incapacitated person.

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