Misconceptions About Medicaid Planning
When long-term care is needed, Medicaid is often the only option for assistance with long-term care bills. With long-term care expenses nearing $15,000 a month, Medicaid eligibility is critically important to most families with a loved one in a nursing home or who may need nursing home care in the future. However, there are several misconceptions about Medicaid planning that can lead to confusion and mistakes. Some of the most common misconceptions include:
"I can give away all my assets to qualify for Medicaid." This is not true. Medicaid has a five-year "look-back" period during which Medicaid will consider any assets transferred for less than fair market value. Giving away assets will generally create a penalty that will make a person ineligible for Medicaid benefits.
"I can put all my assets into a trust and qualify for Medicaid." Medicaid will still count the assets in a revocable trust against a person’s Medicaid eligibility since the assets can be reached by the creator of the trust. While assets in an irrevocable trust are not available to the trust creator, any transfer to an irrevocable trust will still need to get through the five-year “look back” period before those assets are protected for Medicaid eligibility.
"I can just hide my assets and qualify for Medicaid. "Medicaid has strict rules about disclosing assets and income, and failing to do so can result in penalties. With proper planning, numerous strategies are available to protect all or most of a person's assets without resorting to attempts to hide them.
"I can't have any assets and still qualify for Medicaid." This is not true, as Medicaid does allow for certain exemptions, such as a primary residence, primary vehicle, and a certain amount of income and assets. Further, planning with an elder law attorney will allow you to protect other assets that otherwise would be spent down or used to pay long-term care bills.
"I don't need to plan for Medicaid because I have long-term care insurance." While long-term care insurance can help offset expenses, it is unlikely to cover all the costs of long-term care. Medicaid planning can complement long-term care insurance, ensuring that assets are protected instead of being used to pay for care.
If you would like more information on protecting your assets, avoiding out-of-pocket nursing home bills, and becoming immediately eligible for Medicaid, please call me today at 800-841-0065 or email me at dakota@warnerlawfirmpllc.com.
*Medicaid rules change frequently and content in this article may no longer be up to date. This article is for informational purposes only and is not legal advice.
