Main Menu McMahon Law Firm, Attorneys and Counselors at Law

Toll Free
800-391-9987

Local
315-849-9053

Free Initial Consultation
"Attorney Advertising"

Are you making these five common Medicaid mistakes?

Estate planning can be so much more than just drafting a will. Your estate plan is a way for you to manage your assets so that you and your loved ones are taken care of up until your passing. One part of estate planning that can sometimes get overlooked by do-it-yourselfers is Medicaid planning.

Medicaid planning is the process by which an individual strategically manages their assets so as to maintain eligibility for Medicaid benefits. Unfortunately, far too many people make these common mistakes that can make them ineligible, explains a 2015 U.S. News & World Report article.

  1. Transferring money to your children. While this might not cause issues with the IRS, it can certainly create issues when it comes to Medicaid eligibility. Because Medicaid scrutinizes any cash transaction, having your child be the recipient of assets may actually cost you benefits down the road.
  2. Not taking advantage of safe-harbor laws. In the U.S., we have what are called safe harbor laws that permit the transfer of money to certain beneficiaries without costing you Medicaid eligibility. An exempt recipient can include a disabled child, a child who is acting as a caretaker or a trust that has been set up to provide for a disabled person under age 65.
  3. Not taking advantage of spend-down rules. Retirees who have large medical debt but receive too much in Social Security or other retirement benefits should consider tapping into the federal spend-down rule. This allows a retiree to pay on a debt so as to bring them down to the Medicaid eligibility limit.
  4. Applying too early for Medicaid benefits. Before applying for Medicaid, consider how you want to use your savings. If you want to use your savings to provide for your spouse who is planning on staying in the family home, then you may want to hold off on applying for benefits.
  5. Thinking you can do it all on your own. Do-it-yourself estate planning has grown in popularity over the years. But while it can save you money, there is simply no substitute for the legal advice of an attorney. Not seeking the help of a lawyer can lead to costly mistakes for some people that could, in the end, leave them ineligible for Medicaid. 

No Comments

Leave a comment
Comment Information