I've been asked by a senior to investigate: What are the things one needs to keep in mind with the issue of an elderly parent with some assets (house + some savings) who may need to enter into a nursing home or assisted living facility at some point and wishes to protect some of one's assets? [United States issue only].
The basics are that there is a federally mandated 5 year look-back period for qualification for Medicaid to pay for care; during that look-back period, relinquishing of one's assets to one's children creates an ineligibility to receive Medicaid then and delays receipt by some amount calculated relative to typical nursing home expenses in one's area, which could be perhaps several years or so.
(Previous to the deficit Reduction Act of 2005, this look-back period was only three years.)
What are the various pros and cons to such a transfer of one's wealth, if one thinks one may need (maybe) to enter such a facility in a few (3-7?) years? References to taxes and other unforeseen concerns would be helpful.