7 Medicaid Planning Misconceptions Set Straight
September 9, 2004
- Medicaid planning is legal. It is how you can save some of your hard earned assets for your family instead of seeing everything lost to nursing home costs.
- Medicaid planning can be done for you if you are incompetent if you have a Durable Power of Attorney specifically authorizing gifts or Medicaid and estate planning transfers, or a Court finds that if you were competent you would have done Medicaid planning. The Court proceeding is both time consuming and expensive.
- Medicaid looks at all gifts within the 36 months immediately before you apply for Medicaid (60 months for gifts in trust).
- There is no $11,000 annual exemption for Medicaid transfers (as is there is federal gift taxes).
- All transfers for less than full consideration are counted. A bargain sale to your children does not work. The difference between the fair price and the sale price is a gift.
- Paying children for services is not a gift only if there is a written agreement before the services are performed and the amount paid for the services are reasonable.
- Even if you are in a nursing home it is not too late to do Medicaid planning.