Storing records for Medicaid purposes:
The Deficit Reduction Act of 2005 (the DRA) was signed into law on February 8, 2006, making changes to the Medicaid (not to be confused with Medicare) law. Based on these changes we make special recommendations as to how long you should maintain certain records for Medicaid purposes. For our
tax and other record retention recommendations,
click here.
Medicaid is a federal program administered by the states to provide for the payment of medical expenses, including skilled nursing home expenses, of qualified individuals who lack the means to make those payments themselves. The DRA attempts to curb perceived abuses to the Medicaid system.
The DRA, among other matters, requires individuals applying for Medicaid to provide information showing that they made no direct transfers of assets (gifts) within 60 months immediately prior to the date of the application. You cannot avoid this provision by "selling" an asset for a dollar. A gift will be presumed for the difference between what is paid for an asset and its fair market value.
Consequently, we recommend you retain the following records for
five years unless we recommend a longer retention period for tax purposes or under special circumstances or for those records we recommend you keep forever (
click here):
Bank statements and cancelled checks
Cash Transactions
Brokerage account statements
Annuity information
Life insurance information
IRA and pension account information
Real estate
Autos, boats or collectibles
Inheritances
Loans to family members
Household items or items in storage
Precious gems
Gifts
Charitable contributions
If you would like more information on the DRA, please give us a call.
