A key mistake when it comes to Medicaid, is not carefully planning for your assets, according to the Pauls Valley Daily Democrat article titled "Misunderstandings create traps in planning."
Nursing home care is a major expense for many who are considering qualifying for Medicare. However, a key mistake when it comes to Medicaid, is the handling of assets.
The mistake is a simple one to explain, but it is important to make sure you understand it so you will not make it. You cannot give your assets to your children just before you go into a nursing home at Medicaid's expense.
Unfortunately, that is just what many people are planning to do and it will not work.
What is the problem?
Medicaid has a five-year lookback window, which means that the program will look at any asset transfers the applicant (or anyone on his or her behalf) made within five years of needing long-term care.
If those transfers were not made at market value, then Medicaid will not pay for care until the expenses start to exceed the value of the transferred assets. There is a formula to calculate the “penalty period” that will be applied.
An elder law attorney can answer any of your questions about assets and advise you on the best actions that meet your unique circumstances.
Reference: Pauls Valley Daily Democrat (March 8, 2017) "Misunderstandings create traps in planning."