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Don't Make These Medicaid Mistakes

Updated: Jul 9

Some families will do anything to qualify an elderly loved one for Medicaid except get good advice from an expert.

What are the most common mistakes families make when they are trying to find ways to pay for long-term care?

The biggest mistake is taking advice from the wrong people, and much of that advice is related to misguided attempts to spend down assets to meet Medicaid’s strict asset limits. Many people think you have to spend down everything to qualify. Instead of getting professional advice, they listen to friends or family members who get regulations confused between Medicaid and the IRS. They try to hide money, start giving money to people, and give their houses away.

Once people start gifting away money and property away without the right advice or the right strategy, they are at risk of unnecessarily decimating family assets. Fixing the situation is no small feat.

There are as many horror stories as there are people. In one scenario, the husband was ill and needed long-term care that he and his spouse didn’t have money to pay. They would need Medicaid to foot the bill. The wife was worried because she had heard that you must spend down your assets to $2,000. Instead of calling an elder law attorney to get help, she started giving money to her kids.

By the time she was willing to consult with an elder law attorney, there was a lot of damage to undo. Attempting to get the money back was the first order of business. The daughter was able to return the money she had been gifted, but the son couldn’t. He had already bought a house with it.

Situations like these are remarkably common. It is vital to know what your options are before you make any moves. Go to someone who specializes in this, and get help from them, not your cousin, the plumber, or your hair stylist’s sister’s best friend.

In another case, a man wanted to start asset protection planning. An elder laws attorney saw the man a few times, but the man died before their work was finished. After his death, the attorney learned that the man had stuffed a contractor bag with $1 million in cash behind a pegboard wall in his garage. Another client was less than transparent during the asset disclosure process. After the Medicaid application was filed, the client admitted to hiding $150,000 in his closet.

These attempts to hide assets are always discovered, and they always cause problems in the form of long delays for Medicaid benefits. While there is almost always a way to protect assets, there are certain ways to go about it.

Take a tip from the pros. If there’s any inkling that you or someone you love might need to qualify for Medicaid to pay for long term in the next five to seven years, get advice from an elder law attorney. Johnson McGinnis Elder Care Law and Estate Planning is standing by to help. Call 615.8924.2571 to schedule your consultation.


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