7 Medicaid Planning Misconceptions Set Straight

Newsletter
September 9, 2004

  1. 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.
  2. 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.
  3. Medicaid looks at all gifts within the 36 months immediately before you apply for Medicaid (60 months for gifts in trust).
  4. There is no $11,000 annual exemption for Medicaid transfers (as is there is federal gift taxes).
  5. 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.
  6. 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.
  7. Even if you are in a nursing home it is not too late to do Medicaid planning.

Remember, the sooner you act the more you can save.

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