What are the Top 8 Mistakes People Make with Medicaid Planning?

8 Medicaid Planning Mistakes Are:

1. Thinking it’s too late to plan.

It’s almost never too late to take medicaid planning steps, even after a senior has moved to a nursing home.

2. Giving away assets too early.

First, it’s your money (or your house, or both). Make sure you take care of yourself first. Don’t put your security at risk by putting it in the hands of your children. Precipitous transfers can cause difficult tax and Medicaid problems as well.

3. Ignoring important safe harbors created by Congress.

Certain transfers are allowable without jeopardizing your Medicaid planning eligibility. These include: transfers to disabled children, caretaker children, certain siblings and into trust for anyone who is disabled and under age 65; a transfer to a “pay-back” trust if under age 65; and a transfer to a pooled disability trust at any age.

4. Failing to take advantage of protections for the spouse of a nursing home resident.

These protections include the purchase of an immediate annuity, petitioning for an increased community spouse resource allowance, and in some instances petitioning for an increased income allowance or refusing to cooperate with the nursing home spouse’s Medicaid application.

5. Applying for Medicaid Planning too early.

This can result in a longer ineligibility period in some instances.

6. Applying for Medicaid Planning too late.

This can mean the loss of many months of eligibility.

7. Not getting expert help.

This is a complicated field that most people deal with only once in their lives. Tens of thousands of dollars are at stake. It’s penny wise and pound foolish not to consult with people who make their living guiding clients through the process.

8. Confusion about the difference between lifetime liens on property and estate recovery.

There are a number of exceptions to lifetime liens on property, but for estate recovery there is only a deferral for a surviving spouse and a hardship waiver.

Terry Abrams Berger is an attorney who practices elder law with the Florida-based firm of Abrams Berger, P.A. She is dedicated to serving the needs of the elderly and their families nationwide. For more information, call 1 (866) 930-0900 or visit www.abramsberger.com

Other related articles on medicaid planning see Estate Planning