Giving away assets during your lifetime might seem like a smart way to reduce taxes or simplify your estate. But in Georgia, gifting—especially large or poorly timed gifts—can have unintended legal and financial consequences, particularly when it comes to Medicaid eligibility or tax exposure.
Before you transfer property, money, or other assets, here’s what you need to know about Georgia gifting laws, IRS gift tax rules, and Medicaid implications.
Why People Consider Gifting
Gifting is often used to:
- Reduce the size of an estate
- Avoid probate
- Help family members while you’re still living
- Qualify for Medicaid by reducing countable assets
- Shift assets to the next generation
But gifting without a plan can backfire—especially if you’re thinking about long-term care or trying to preserve wealth.
What’s the Annual Gift Tax Exclusion?
As of 2025, the IRS allows you to give up to $18,000 per person per year (or $36,000 per couple) without triggering the federal gift tax. You don’t need to file a gift tax return if you stay under that threshold.
If you give more than the exclusion amount to any one person in a year, the excess counts against your lifetime gift and estate tax exemption, which is $13.61 million per person in 2025 (subject to change).
Important: Georgia does not have a state-level gift tax, but federal rules still apply.
Medicaid and the 5-Year Look-Back Rule
This is where gifting gets risky. If you apply for Medicaid to help pay for nursing home care, Georgia’s Medicaid program will review all gifts made in the previous five years.
If you’ve made gifts during that time—even small ones—they can trigger a penalty period, delaying your eligibility and leaving you on the hook for long-term care costs.
Example:
You transfer your home to your child for free, three years before applying for Medicaid. That transfer is considered a gift. If the home was worth $200,000, it could create a penalty period of months or years where you’re ineligible for Medicaid.
The takeaway: Gifts made without a plan can jeopardize future care and cost more than they save.
👉 Learn more about Medicaid and long-term care planning in Georgia
Can Gifting Still Be a Smart Strategy?
Yes—but only with careful planning. Gifting can help when:
- You’re not likely to need Medicaid
- You stay under the annual exclusion limits
- You use irrevocable trusts to protect assets
- You give assets that have minimal capital gains exposure
- You coordinate with your overall estate plan and tax strategy
For larger estates or Medicaid planning, gifting often involves setting up a Medicaid Asset Protection Trust or making structured gifts well in advance of needing care.
Common Mistakes to Avoid
- Gifting real estate without addressing capital gains
- Giving away assets without a written plan
- Making Medicaid-disqualifying gifts too close to needing care
- Leaving yourself with too few assets to cover your own expenses
- Failing to consult a tax or estate planning attorney
👉 Also read: Estate Planning Mistakes That Stress Out Heirs
Let Hurban Law Help You Gift Without Regret
At Hurban Law, LLC, we help Georgia families make smart decisions about gifting, asset protection, and long-term care. Whether you’re planning ahead or already considering Medicaid, we’ll help you avoid costly mistakes and keep your financial goals on track.
Contact us today to discuss your gifting strategy as part of a sound estate plan.
