Medicaid Planning Lawyer Working on a ComputerOur Medicaid planning attorneys advise clients to start their benefits strategy long before they need nursing home care. Many people who exceed the income and asset limits to qualify for Medicaid try to “spend down” excess funds as quickly as possible. Unfortunately, they soon find that their eligibility has been delayed by months —or years—due to transfer penalties.

Don’t Make a Mistake That Delays Your Medicaid Benefits!

Early planning is key to getting full payment of your Medicaid benefits. Any gifts or transfers made up to five years (60 months) before the date of application will incur a penalty—a certain number of months before the applicant becomes eligible for Medicaid coverage. There’s no limit to how long a penalty period can be, forcing applicants to pay out of pocket for most of their care due to a few simple mistakes.

Applicants may unintentionally incur a penalty if they:

  • Plan to give everything to a spouse. Married couples may think that if one spouse needs nursing home care and the other doesn’t, the applicant can simply transfer all assets into their spouse’s name. However, the state considers all assets of a married couple jointly-owned and are counted towards the applicant spouse’s Medicaid eligibility. The Community Spouse Resource Allowance (CSRA) allows you to transfer some assets to a healthy spouse, but most of your liquid assets (such as cash, stocks, bonds, and real estate) are expected to be put toward your long-term care needs.
  • Fail to keep accurate records. Medicaid reviews all of your property transfers to make sure you received fair market value for each one. If you don’t have proper sales receipts or documentation for assets sold during the look-back period, you could incur a penalty even if the item was sold for fair market value.
  • Wait to set up a trust. One way to preserve assets for your family is to create an irrevocable Medicaid Qualifying Trust. While these trusts can protect a wide range of property from being spent on long-term care, they are most effective if created before the look-back period.
  • File paperwork too late. If you’re eligible for Medicaid, you could miss out on several months of benefits if you don’t file your application on time. Although you could seek retroactive benefits, these are generally only for a few lost months, taking tens of thousands of dollars out of your family’s savings.
  • Give too many gifts. Gifts are an effective way to spend down excess cash, but all gifts or transfers of assets made within the look-back period are subject to penalties. A skilled attorney can help you make the most of gifting rules and give away as much as possible before the five-year look-back period begins.
  • Fund a trust at the last minute (or not at all). After you set up a Medicaid Qualifying Trust, you will need to properly transfer assets from your name to a third party (the trustee) who will hold them for your named beneficiaries. If you fail to retitle assets into the trust before the look-back period, those transfers will be counted as gifts and will not be exempt from penalties.
  • Wait to speak to a lawyer. The easiest way to ensure your benefits will be there when you need them is to get help from a Medicaid and estate planning attorney. Mistakes in care planning can have long-term financial effects on a family that can last for generations. A lawyer can examine your situation and help make sure nothing falls through the cracks.

Early Planning Helps You Qualify for Medicaid as Soon as Possible

Medicaid rules are complicated and constantly changing, but the elder law attorneys at Landskind & Ricaforte Law Group, P.C. can determine the best way to get the benefits you need. Contact us today through our online form to get started or order our free guide, Estate and Medicaid Planning in New York: What Everyone Needs to Know.


Post A Comment