Common Errors in Long-Term Care Planing

    Medicaid is a state program funded in part by the federal government. Each state has its own Medicaid rules and regulations; there are 51 Medicaid programs when you include the District of Columbia. Seniors, disabled persons and their families should consult with an experienced elder law attorney familiar with the Medicaid program in the state in which the Medicaid application is to be filed.

    Medicaid Myths

  • Thinking it's too late to plan. It is never too late to plan. It is possible to begin planning even after the senior or disabled person has entered a nursing home. With proper planning it is possible to protect much of the senior or disabled person's assets.
  • Giving away assets too early. These assets belong to the senior or disabled person. Don't put the senior or disabled person at risk by making premature gifts to family members. Premature gifts can also result in tax and Medicaid problems, particularly with the changes in the law because of the Deficit Reduction Act of 2005 (DRA).
  • Ignoring exempt transfers. Some transfers do not result in periods of Medicaid ineligibility. These transfers include transfers to disabled children, minor children, some caretaker children, some siblings, d(4)(A) trusts for disabled persons under the age of 65, and d(4)(C) pooled trusts for disabled persons of any age.
  • Failing to take advantage of spousal protections. These protections include maximizing the Community Spouse Resource Allowance by increasing countable resources prior to the "snapshot" date, and by purchasing exempt resources, such as a motor vehicle, home, or prepaid burial, or by converting countable resources to income.
  • Applying for Medicaid too early. As a result of the DRA, applying for Medicaid within five years of making a gift can result in a period of ineligibility that will start not when the gift is made, but when the senior or disabled person is in the nursing home with no funds available to pay for his or her care.
  • Applying for Medicaid too late. Applying for Medicaid too late can result in spending funds that could have been protected by proper planning.
  • Failing to keep good records. This has become a critical issue in light of the DRA. An experienced Medicaid eligibility worker will examine thoroughly all Medicaid applications. The applicant should retain records to support all items listed on the application, document the applicant's assets as of the date of entry into the nursing home, and verify the disposition of the applicant's assets for the five years period prior to the filing of the application.
  • Not getting expert help. Medicaid asset protection planning is complicated. Most people will require this planning only once during their lives. Because a great deal is at stake, it is wise to consult an experienced elder law attorney when nursing home care is necessary. The attorney's fees are an investment, not an expense.
  • The attorneys at the Law Office of Meg Elizabeth Goblet, P.C. are experienced in long-term care planning, and they are available to assist clients with these critical issues.

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