1. Thinking it’s too late to plan. It’s almost never too late to take 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 and your spouse first. Don’t put your security at risk by putting it in the hands of your children. Premature transfers can cause difficult tax and Medicaid problems as well.
3. Ignoring important safe harbors created by Congress. Certain transfers are allowable without jeopardizing Medicaid eligibility. These include transfers: to disabled children, to caretaker children, into trust for certain disabled individuals and into a “pay-back” trust.
4. Failing to take advantage of protections for the spouse of a nursing home resident. These protections include the purchase of a “pension” in the form of an immediate annuity, the transfer of assets to a “solely for the benefit of” trust and the petitioning for and increased community spouse resource allowance or increased income allowance.
5. Applying for Medicaid too early. This can result in longer ineligibility period in some instances.
6. Applying for Medicaid 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 property subject to estate recovery and property that is exempt. Only certain assets may be subject to Medicaid payment estate recovery after the nursing home patient’s death. In many instances, re-titling assets during lifetime may exempt the property from estate recovery.
By: Matthew M. Wallace CPA, JD
Published edited August 24, 2008 in The Times Herald newspaper, Port Huron, Michigan as: Get an expert’s advice on Medicaid eligibility