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. 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 your assets in the hands of your relatives. Precipitous transfers can cause difficult tax and Medicaid problems as well. While a substantial amount of money and assets can be protected, transfers have to be structured just right to avoid a long Medicaid penalty period. The Medicaid penalty period is the number of months that Medicaid will not pay the nursing home bill.
3. Ignoring important safe harbors created by Congress. Certain transfers are allowed without jeopardizing Medicaid eligibility. These include: transfers into a trust for the sole-benefit of a spouse, transfers to disabled children, caretaker children, and certain siblings.
4. Failing to take advantage of protections for the spouse of a nursing home resident. These protections include petitioning the court for an increase community spouse resource allowance and, in some instances, petitioning for an increased income allowance.
5. Applying for Medicaid too early. This can result in a longer ineligibility period in some instances.
6. Applying for Medicaid too late. This can mean the loss of many months of eligibility.
7. Expecting the government to protect your assets. The government will only tell you what you can't do, not what the law says you can do to protect your assets. In this day and age, we have to rely on ourselves and our family members to look out for our own interests and protect our assets, not the government.
8. Expecting the nursing home to protect your assets. The nursing home staff might help you fill out the Medicaid application, but their job is to provide care, not protect your assets. When a loved one is in a nursing home, you may need to rely on various professionals, such as the nursing home staff to provide care, and an elder law attorney to advise you on Medicaid and protecting assets. It is important not to confuse the roles. Just as you would not ask the elder law attorney a medical question such as "what is the proper dosage for a medication," is it really a good idea to expect the care staff and medical professionals at the nursing home to give you sound legal advice on Medicaid?
9. Not getting expert help. This is a complicated field that most people deal with only once in their lives. Tens of thousands of dollars or more are at stake. It is penny wise and pound foolish not to consult with experts who make their living guiding clients through the process.
Andrew Byers is an Elder Law Attorney who assists seniors and their families in qualifying for Medicaid nursing home benefits in Oakland County, Macomb County, and Wayne County, Michigan.